The Federal Executive Council (FEC) has okayed the borrowing of $2.2 billion external loan to finance government programmes.
This came as the Council chaired by President Bola Tinubu equally approved N250 billion Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund for long term mortgage loans for Nigerians.
These were disclosed by the Minister of Finance and Coordinating Minister of Economy, Wale Edun, who briefed newsmen after the Council meeting chaired by President Bola Tinubu at the Presidential Villa on Thursday.
According to him, the $2.2 borrowing was “to complete the borrowing program of the federal government in terms of the external borrowing with the approval of the US Dollars 2.2 billion financing program made up of access to the international capital market for some combination of the Euro bond offer and the Sukuk bond offer.
Perhaps a Euro bond of about $1.7 billion and Sukuk financing of another $500 million.
The actual makeup of the financing, which will be done as soon as the National Assembly has considered and hopefully approved of the borrowing plan and the external borrowing approval is given, will be done this year, as soon as possible after approval.
And the actual combination of instruments that will be raised will depend on what the advisors, the transaction advisors, the commercial advisers, what they say about market conditions at the time which we decide and we want to enter the market.”
According to him, earlier borrowing in the year showed “the resilience
of the Nigerian financial markets, and the depth, their capacity, the increased complexity and sophistication by having a domestic issuance of dollar bonds, which attracted Nigerians investors from far and wide, as well as others.
“And the important point about it was that we used the Nigerian financial system, the Nigerian regulatory system, and Nigerian financial expertise and structures. And it was, apart from any other thing, a vote of confidence in the economic reform program of Mr. President.”
On the N250 billion mortgage financing, the Minister said “That fund is the basis for the revival and the the return of long term mortgage financing to the Nigerian economy.
“The MOFI Real Estate Investment Fund is going to be, in the in first instance, a 250 billion Naira fund that will provide low cost, long term mortgages to Nigerians that want to acquire houses.
It will help to complete or help to fill part of the gaping 22 million unit housing deficit. Of course, it will create jobs; it will stimulate economic growth, and of course, it will also pave the way for other investors, private sector, to also come in and participate in the all important housing construction industry with huge benefits.
And the concept is long term. Concept is a single one. Long term investors have the opportunity to earn market rates of interest on investment and market returns, market price based rates of return on investment, and this is going to be blended with seed funding of 150 billion.”
