Minister of Finance, Mrs. Kemi Adeosun has disclosed yesterday, that the Federal Government would apply US$3 billion in refinancing the legacy debts of the immediate past government.
According to her, the outlay is part of the US$5.5 billion foreign loan being sourced from the International Financial Markets.
Kemi Adeosun The minister, who appeared on Arise TV’s news programme, said the proposed $5.5 billion loan was made up of two components, including refinancing of heritage debts to the tune of $3 billion and new borrowing of $2.5 billion for the 2017 Budget.
She said, the first component of $2.5 billion represents new external borrowing provided for in the 2017 Appropriation Act to part-finance the deficit in that budget. The borrowing will enable the country to bridge the gap in the 2017 budget currently facing liquidity problem to finance some capital projects.
“For the second component, we are refinancing existing domestic debt with the US$3 billion external borrowing. This is purely a portfolio restructuring activity that will not result in any increase in the public debt,’’ she added
Adeosun further noted that the country’s debt surprisingly rose from N7.9 trillion in June 2013 to N12.1 trillion in June 2015, despite the fact that only 10 per cent of the budget was allocated to capital expenditure when oil price exceeded $120 per barrel.