FEC approves plan to borrow fresh $2.2bn

The Federal Executive Council (FEC) has approved a new $2.2 billion borrowing plan, consisting of $1.7 billion in Eurobonds and $500 million in SUKUK financing, as part of an effort to bolster Nigeria’s economic reforms and improve financial stability. The announcement came after a FEC meeting led by President Bola Tinubu at the State House, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy.

Edun clarified that the borrowing plan, which still requires National Assembly approval, will enable Nigeria to tap into the international capital market. “The first one was to complete the borrowing program of the federal government in terms of the external borrowing with the approval of the $2.2 billion financing program,” Edun said. He further outlined that the funds will be accessed through a “combination of the Euro bond offer and the Sukuk bond offer.”

Highlighting Nigeria’s economic resilience, Edun emphasized that accessing the international capital market underscores global support for President Tinubu’s macroeconomic strategy. “Being able to access the international capital market is also a sign of the acceptance and the support for the macroeconomic program of Mr. President and indeed his entire administration,” Edun said. He noted that the economic recovery plan targets “the macroeconomic pillars of market pricing of the PMs and market pricing of foreign exchange.”

In addition to the borrowing plan, FEC approved a N250 billion Real Estate Investment Fund, aimed at alleviating Nigeria’s 22 million-unit housing deficit. The Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund is designed to provide affordable, long-term mortgages for Nigerian citizens. Edun described this initiative as a critical measure to not only address the housing gap but also stimulate private sector investment in the housing industry.

The fund offers mortgages with interest rates between 11% and 12%, considerably lower than the current market rates, which can exceed 30%. “The loans will have longer repayment tenures, potentially spanning 20 years or more, to make homeownership more accessible,” Edun said.