Nigeria has $500 million of commitments for the planned $1 billion eurobond it intends to issue before the end of the year and any decision to increase the size of the offer will depend on pricing, Finance Minister Kemi Adeosun said on Thursday.
Nigeria wants to sell a $1 billion in eurobonds by the end of the year although, as of Thursday, no bank had been appointed to arrange the issue.
“At the moment am focused on the $1 billion,” she said in a video recording to an investor conference in Lagos.
Nigeria, Africa’s largest economy, slipped into recession for the first time in 25 years in the second quarter, largely due to low global oil prices. Crude oil sales account for about two-thirds of government revenues.
The government has laid out plans to spend a record 6.866 trillion naira ($22.5 billion) to help pull Nigeria out of recession in a draft 2017 budget sent to parliament for approval.
Spending this year was 6.06 trillion naira, but the government has struggled to fund this, and analysts were sceptical that it would manage to meet the targets for overseas borrowing that it has set for the next few years.
Adeosun said the country was “further along” with the African Development Bank for a $1 billion budget support loan than the World Bank due to scheduling issues.
“We have pushed World Bank funding into next year’s budget,” she said.
President Muhammadu Buhari has asked parliament to approve $30 billion of foreign borrowing to fund planned infrastructure projects until 2018, according to a letter read out to lawmakers on Tuesday.
The proposed borrowing includes the sale of eurobonds worth $4.5 billion and budget support of $3.5 billion, according to the letter.
The finance ministry said on Thursday the $30 billion borrowing was going to be phased over a three-year period to cover proposed projects between 2016-2018.
Adeosun said Nigeria was interested in tapping funds at concessionary rates to develop infrastructure and that most of the funding it was seeking would carry concessionary terms.
The funding is being sought from multilateral agencies including the World Bank, Africa Development Bank, Islamic Development Bank, Japan International Co-operation Agency and China Eximbank, the ministry said in a statement.
Adeosun said expected taxes collection as a percentage of GDP which is currently at 5 percent to hit 7 percent within three-years and to reach 10 percent within 5 years.
Nigeria’s debt office has said the country can borrow up to $22 billion in 2017 from both local and foreign sources without breaching the debt threshold it has set for itself.
(Additional reporting by Oludare Mayowa and Felix Onuah in Abuja; Editing by Angus MacSwan)