Kemi Adeosun, Nigeria’s Finance Minister has said the Federal Government plans to borrow less in naira and more in foreign currency. She said such loan could be obtained at a cost of 7 percent overseas, which is about half the interest rate government pays on loans it takes locally.
“As the economy recovers and grows we will be in a much better position to repay instead of just rolling over the debt,” she told reporters after a cabinet meeting where the government approved a spending plan for 2018-2020.
Adeosun also said plans to restructure its debt portfolio into longer term maturities by borrowing more offshore and less at home to lower cost and also support private sector access to credit to boost the economy.
This the government hopes to achieve by issuing dollar debt as $3 billion worth of naira treasury bills mature.
“We are not increasing our borrowings. We are simply restructuring. Instead of owing naira, we will be owing dollars,” Adeosun said.
Equally, Udoma Udo Udoma, Minister for Budget and National Planning, who was also at the briefing, said the government had approved “a slightly different” growth trajectory of 3.5 percent for next year, down from 4.8 percent it announced last week in its strategy paper.
Udoma forecast growth would top 4.5 percent by 2019 and 7 percent by 2020.
He also said the government was projecting 2.3 million barrels per day crude production for next year at a price of $45 a barrel.