The Honorable Minister of Finance has announced today that the Federal Ministry of Finance has successfully raised $3bn from the debt capital markets in Europe.
A 10 year bond sold at a yield of 6.5% and a 30 year bond sold at a yield of 7.625%. On 10th October 2017, the President had wrote the Senate asking for approval to borrow $5.5bn; $3bn from a bond sale & $2.5bn in loans, to fund a supplementary budget and refinance impending debt obligations.
The International Monetary Fund has warned that the debt to GDP ratios of Public Finances is becoming unsustainable and its high time the government:
- Cuts down on recurrent expenditure
- Increase non oil revenue
- Stop giving tax breaks and widen the bracket
On the 7th of November 2017, as a result of the decision to borrow $5.5bn and the outline of the 2018 appropriation bill that pairs deficits with debt servicing, Moody’s Investor Service (The Global Credit Rating Company) had downgraded Nigeria to BA2 with a stable outlook (three steps to junk) warning or consequences, should the Government fail to get its acts in order.