Nigeria will start borrowing abroad in the third quarter, Finance Minister Kemi Adeosun said on Thursday, in the wake of the central bank’s decision to float the naira last month.
According to Reuters’ report monitored by Business247 News Online, the government has said it plans to borrow up to $10 billion, with about half of that coming from foreign sources, to help make up a budget shortfall exacerbated by a slump in oil prices.
The oil producer had initially planned to hold Eurobonds road shows in March but postponed sales as investors complained about the overvalued naira, according to bankers. In June, the central bank floated the naira.
On Thursday, the currency hit a record low of 330.50 in off-market transactions, after just one trade was made during regular interbank hours at a rate of 309 naira to the dollar.
“We have been borrowing largely from the domestic market because we needed to get the exchange rate sorted out to enable us to borrow from the international market. The international borrowings will begin to come in Q3,” Adeosun told reporters.
Nigeria’s government has said it wants to change the balance of its debt portfolio so that 40 percent of its borrowing comes from abroad, compared with 16 percent now. It also wants to extend the average maturity of its debt profile.
Adeosun met international investors in June on a non-deal roadshow in London as Africa’s biggest economy explores fund-raising options to finance a record budget deficit.
Last week the central bank governor flew to Britain and the United States to try to lure back investors.