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COVID-19 forces FG to abandon 2020 budget, to issue another Eurobond in Sept to finance capital deficit.

Nigeria’s Minister of Finance, Budget and National Planning, Dr Zainab Ahmed has confirmed that the Federal Government’s 2020 budget of sustaining growth and job creation was abandoned in response to the fiscal pressures arising from the COVID-19 pandemic.

Speaking at the Chartered Institute of Stockbrokers (CIS) 2021 national workshop on Thursday, she said the Federal Government would issue another Eurobond in September to finance capital deficit.

“The year 2020 was like no other year, particularly due to the impact of the COVID-19 pandemic, our three-year consecutive growth in the GDP was stalled at the second quarter of 2020 by the harsh economic impact of the global pandemic,” she said.

However, she said the Federal Government through the Debt Management Office (DMO) raised the sum of N669 billion from the Nigerian capital market through issuance of Sukuk Bonds between 2018 and 2020.

The theme of the national workshop was: “Leveraging the Financial Markets to Achieve Double- Digit Economic Growth for Nigera.”

She said “This financing was used to construct and rehabilitate more than 44 roads across the six geo-political zones of our country.

“Also worthy of note, is the offer for subscription of the Federal Government of Nigeria Savings Bonds of the DMO which has been executed successfully, bond issue after bond issue.

“What is pleasing to us, is that every time the DMO goes for bond issue, the bond are several times oversubscribed.

“This shows the interest of the investing public in Nigeria putting their monies to support the Federal Government of Nigeria in bridging our infrastructure deficit gaps,’’ Ahmed said.

“The Federal Government of Nigeria also has access to the international markets with a number of Eurobonds issuance to finance capital deficit and the next round of Eurobond issuance would be sometime in September this year.

“We will be going out to international capital market and already we have very positive indications to that regard.’’

Ahmed noted that the Federal Government recently approved the establishment of an Infraco Company, an infrastructure company, envisaged to be world class infrastructure development vehicle for Nigeria.

“This company will serve as a platform for seamless public private partnership in infrastructure financing in the country, interfacing with institutions such as Central Bank of Nigeria, the Nigerian Sovereign Investment Authority, the pension funds and other financial institutions,’’ she said.

Ahmed said the theme of the workshop was apt and pivotal to economic agenda of this administration.

“It is a known fact that no nation of the world attains optimal infrastructure development without the efficient use of its capital market.

“I will like to appreciate the important role of the Nigerian capital market, the role that it has played over the years and it will continue to play in the infrastructure financing and capital formation of our country.

“The NCM has over the years provided access to significant long-term development projects to the government of Nigeria and also to the other tiers of government and also the private sector.

“In an attempt to achieve economic growth, the government had earlier developed the ERGP 2017 to 2020, it was a medium term plan designed to muster growth and build globally competitive economy. “Through the diversification of the economy to increase investment in infrastructure, digitisation of the economy, improvement in the ease of doing business, and development of human capital.”

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