President Muhammadu Buhari has written to the National Assembly to seek for approval to issue an additional $500 million Eurobond to fund capital projects in the 2017 budget.
This was revealed during a Senate session on Wednesday.
The latest demand follows the oversubscription of a similar bond worth $1billion approved earlier this year by the Senate, also to finance budget.
Last month, the Vice President, Yemi Osinbajo, also asked the parliament to approve the issuance of a new $500 million Eurobond to plug the $7billion deficit in the budget.
“We wish to take advantage of favorable market conditions to issue a Eurobond Debt Instrument of $500 million to fund the implementation of the budget.
“The external borrowing incurred to date consists of $600m from the African Development Bank and $1bn Eurobond from the international capital market only. Thus, based on the 2016 appropriation and applying the average exchange rate, there is headroom to access further international funds,” Osinbajo said.
It would be recalled that Nigeria has been in talks to acquire at least a $1billion loan from the World Bank and the African Development bank to fund the budget deficit.
The federal government in this year’s budget outlined plans to spend $22.5 billion to get the country out of recession. The period for the implementation of the 2016 budget had earlier been extended to March 31, 2017 by the National Assembly.
Nigeria’s economy shrank 1.5 percent in 2016 amid a slump in oil revenue and diminished foreign investment, according to International Monetary Fund estimates, the first full-year contraction since 1991.
Meanwhile, the Nigerian Association of Petroleum Explorationists (NAPE) on Wednesday said the federal government has the capacity to achieve 40 billion barrels of oil reserve projection by 2020.
President of the association, Mr Abiodun Adesanya disclosed this in Lagos against the backdrop of government’s plans to boost oil production.
Adesanya said that the federal government’s Economic Recovery and Growth Plan (ERGP) target was to restore oil production to 2.2 million barrels per day (mbpd) in 2017.
He said that increasing it to 2.5mbpd by 2020 could be achievable if monitored adequately. He said that that the nation needed to increase exploration activities in order to achieve that lofty target.
The NAPE president said that Federal Government had targeted 40 billion barrels reserves and three million barrels per day production by the year 2020.
According to him, the Nigerian oil and gas industry is currently experiencing declining reserves owing to reduced exploration due to militancy, a situation that had caused much concern.
He said that successful exploration and development of new oil fields would require the use of novel integrated technologies. Adesanya said that government was committed to meeting the 40 billion barrels oil reserve target, but decried the rate of crude oil theft and pipeline vandalism in the country.
He said that it was in the best interest of the government to increase production. “It is for all of us as stakeholders to work together, minimize the distraction and face the business of boosting the reserves production to 40 billion barrels.’’
He said that exploration successes in other African countries had put pressures on Nigeria as a competing destination for oil and gas investments.
He said that there was an urgent need to examine the effectiveness of existing policies to drive growth in the oil and gas industry as well as the development of roadmaps and new policy initiatives.