TheCable

The federal government has suspended plans to sell additional N2.18 billion eurobonds due to the outbreak of the Omicron COVID-19 variant.

An eurobond is a debt instrument denominated in a different currency than the local one of the country where the bond is issued.

According to Bloomberg, Patience Oniha, director-general for the Debt Management Office (DMO), disclosed this at a conference on Tuesday.

“Omicron came, and markets are not exactly good to go back now,” she said.

“I can say for this year, we are not approaching the market.”

In October, Oniha had said the government was closely monitoring the international capital market for an additional $2.18bn eurobond issuance after successfully raising $4 billion in September.

The amount will make up the $6.18bn external borrowings already appropriated in the 2021 budget.

As contained in the 2021 fiscal framework, the federal government projected N8.12 trillion total revenue to fund the 14.57 trillion aggregate expenditure – inclusive of the supplementary budget.

Consequently, the projected fiscal deficit of N6.45 trillion is expected to be financed mainly by domestic and external borrowings.

The eurobonds provide a significant amount of funds to finance projects listed in the 2021 budget.