The Federal Government has unveiled plans to add another $2.2 billion to Nigeria’s growing external debt portfolio through a combination of Eurobond and Sukuk bond offerings, pending National Assembly approval.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, announced the borrowing programme after Wednesday’s Federal Executive Council (FEC) meeting at the Presidential Villa, Abuja, at a time when the nation’s debt servicing costs have reached historic highs.
The proposed financing package includes approximately $1.7 billion in Eurobonds and $500 million in Sukuk bonds, with the specific mix to be determined by market conditions and advisor recommendations. This new borrowing comes as Nigeria continues to grapple with significant fiscal challenges and a weakening naira.
While presenting the initiative as a sign of international confidence in President Bola Tinubu’s economic policies, Edun highlighted the government’s earlier success with domestic dollar bond issuance. However, financial analysts have increasingly voiced concerns about the sustainability of Nigeria’s debt profile and its impact on future generations.
In a parallel development, the FEC also approved the creation of a N250 billion real estate investment fund aimed at addressing Nigeria’s 22 million housing unit deficit. The Morph Real Estate Investment Fund, backed by N150 billion in seed funding, promises to provide low-cost, long-term mortgages to Nigerians.
“Long-term investors have the opportunity to earn market rates of interest on investment,” Edun noted, though questions remain about the accessibility of these mortgages for average Nigerians given the current economic climate.
The minister emphasised that the borrowing programme demonstrates international support for the administration’s macroeconomic policies, particularly regarding fuel subsidy removal and foreign exchange market reforms. However, the timing of this substantial borrowing initiative, amid rising inflation and currency volatility, has raised eyebrows among economic observers.
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