By Tony Obiechina, Abuja
To cushion the effect of the Coronavirus pandemic on the economy, the Federal Government plans to borrow the N850 billion External Borrowing approved in the 2020 Appropriation Act to Finance the Budget deficit.
The Debt Management office (DMO) said in a statement on Tuesday, that this followed the conversion of the N850 billion new external borrowing in the 2020 Appropiation Act to Domestic Borrowings.
According to the statement, the Appropriation Act, comprising N794.99 billion Domestic Borrowing and N850 billion, approved a total of N1,594.99 billion as New Borrowing to part-finance the Deficit in the Budget.
The statement said, “with the Covid-19 Pandemic and its attendant effect on the world economy and the International Capital Market, the Federal Government reappraised its Borrowing Plans and decided that it would be more expedient to raise the N850 billion, earlier approved as External Borrowing, from Domestic Sources.
“This conversion from External to Domestic is to ensure that the implementation of the 2020 Appropriation Act is not jeopardized by lack of funds.
“Thus, the N850 billion is not New or Incremental borrowing, rather it is an amendment of the source of borrowing from External to Domestic. With this change, the total New Domestic Borrowing under the 2020 Appropriation becomes N1,594.99 billion which is the same as the total New Borrowing in the 2020 Appropriation Act.
“For compliance with the law, His Excellency, President Muhammadu Buhari forwarded requests to the Senate and House of Representatives to convert the source for raising the N850 billion from External to Domestic.
“The Senate approved the request on Tuesday, April 28, 2020, while the approval of the House of Representatives is expected. Upon approval of the request by the House of Representatives, the Debt Management Office will issue FGN Securities in the Domestic Market to raise the N850 billion, thereby providing high-quality investment opportunities for the investing public”, it added.