Kemi Adeosun, minister of Finance, has said that the federal government will save N91.65 billion per annum by refinancing its $3 billion short-term treasury bills into longer tenured international debt.
A statement issued by Oluyinka Akintunde, her media adviser to the minister, said, she expressed confidence that the federal government’s revenue and debt management strategy would reduce the country’s debt service risk and fast-track its development.
Adeosun
observed that the government was refinancing its inherited debt portfolio and this would lead to significant benefits, particularly a reduction in cost of funds. “The proposed refinancing of $3bn worth of short-terms Treasury Bills into longer tenured international debt is expected to save N91.65bn per annum. Other benefits of our revenue and debt management strategy include improvement in foreign reserves as well as reduced domestic debt demand, which will reduce crowding-out of the private sector and support the aspirations of the monetary authorities to bring down interest rates,” she noted.
While welcoming the advice of Nigeria’s international development partners, including the International Monetary Fund, Adeosun said the strategy would achieve a number of objectives for the country.
She stated that a key element of the economic reform strategy was the mobilisation of revenue to improve the debt service to revenue ratio.
Adeosun said, “The difference in our economic strategy is that we are changing the mix of revenue sources available to government from the traditional oil or debt to a combination of oil, debt and domestic revenue. This is a long-term strategic reform, which is critical to our future economic growth, and in the shortterm will enable our debt service to revenue ratio to improve.”