…As naira crashes to N309 to USD
By Amechi Ogbonna with Agency Reports
Nigeria will flag off its offshore borrowing in the third quarter, Finance Minister, Kemi Adeosun, said on Thursday in the wake of the Central Bank of Nigeria’s (CBN)’s decision to float the naira last month.
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 heightened by a slump in oil prices.
Nigeria had initially planned to hold eurobonds roadshows in March but postponed sales as investors complained about the overvalued naira, according to bankers. In June, the apex bank floated the naira, removing its 16 months cap on the local currency.
But the currency hit a record low of N330.50 in off-market transactions, after just one trade was made during regular interbank hours at a rate of N309 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.
The Federal Government has said it wants to change the balance of its debt portfolio so that 40 per cent of its borrowing could come from offshore lenders, compared with 16 per cent 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 CBN Governor, Mr. Godwin Emefiele, flew to Britain and the United States to try to woo back investors to Nigeria.