The Federal Government borrowed $300m from Nigerians in the Diaspora before it secured the approval of the National Assembly, the Debt Management Office indicated on Wednesday.

The DMO gave this indication in a response to an enquiry by a non-governmental organisation, Social Action Nigeria.

Social Action Nigeria had in a letter written to the DMO on November 24, 2017, demanded to know what uses the Federal Government intended to put the $5.5bn it planned to borrow from external creditors as well as the terms of the loans.

In a response signed by the Director-General, DMO, Ms. Patience Oniha, and dated November 29, 2017, the agency explained that the $300m it had borrowed from Nigerians in the Diaspora was part of the $5.5bn approved for borrowing by the National Assembly.

While the approval was given on November 14, 2017, the $300m was raised in June 2017 through the issuance of the Diaspora Bond.

The DMO said, “On November 14, the House of Representatives and Senate approved external financing in the manner as follows:

“$2.5bn; this amount was approved for the part financing of the deficit in the 2017 Appropriation Act. The Act includes a provision for new external borrowing of N1.068tn, equivalent of about $3.5bn. Out of this amount, only $300m has been borrowed through the issuance of a Diaspora Bond in June 2017.

“$3bn: In this specific instance, this borrowing is for the redemption of maturing domestic debt.

“Loan sources: The plan is to raise the funds through the issuance of securities in the international capital market in the form of Eurobonds or Diaspora Bonds, or a combination of both. In other words, the lenders to the government would be all the investors who invest in the bonds.

“Conditions: As you may be aware, the DMO successfully priced a dual-tranche $3bn Eurobond on November 20, 2017 for which a press release was issued.”

On the conditions for the loans already secured, the DMO said the 10-year $1.5bn Eurobond maturing in 2027 carried an interest rate of 6.5 per cent, while a 30-year $1.5bn Eurobond maturing in 2047 carried an interest rate of 7.625 per cent.