Abuja, Nigeria (PANA) – Nigerian President, Dr. Goodluck Jonathan, Tuesday asked the country’s Senate to increase the proposed US$100 million Diaspora bond, as contained in the 2012-2014 Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF/FSP), to US$300 million.
In a letter addressed to the Senate President, David Mark, and titled, “Request for an Increase in the Amount to be Raised Through the Diaspora Bond from the International Capital Market”, President Jonathan noted that although the Senate had already approved the MTEF/FSP as working document for the nation’s budget in the next three years, the increase has become necessary in view of great interest exhibited by Nigerians in the Diaspora to invest in the bond.
According to President Jonathan, the development was aimed at allowing for more allotments to Nigerians in Diaspora than would have been possible with a lower amount.
He explained that the proposed bond would serve to raise funds from Nigerians abroad to finance development projects in priority sectors of the nation’s economy.
Meanwhile, the bond, he stated, would be issued in the International Capital Market (ICM) and the process for its issuance had started with the advertisement of Requests for Proposal for Transaction Parties for the Offering.
His words: “I wish to inform the Senate President that from engagements with Nigerians in Diaspora and the enquiries received since the publication of the Request for Proposal, there is a high level of interest in the Diaspora bond and there is an indication that the US$100 million could be inadequate, relative to the demand expected from investors for the bond.
“Based on the level of subscription expected, I wish to request for the National Assembly’s approval to increase the amount to be raised through the Diaspora bond from US$100 million to an amount, up to a maximum of US$300 million.”
President Jonathan added that the issuance of a lower amount could result in the rejection of subscription which would be a disappointment for Nigerians in diaspora after heeding the call to support the growth of their country.
Other gains of the increase listed by the President include opportunity to invest in the funds to be raised in a project with a higher value which would have a greater impact on the economy.
He also requested for a Resolution of the National Assembly evidencing the approval in line with section 21 (1) of the Debt Management Office Establishment (etc) Act, 2003.
The section states that, “No external loan shall be approved or obtained by the Minister unless its terms and conditions shall have been laid before the National Assembly and approved by its resolution”.
The letter indicated that such a step would be required by the operators and regulators of the ICM as part of their due diligence process.
Photo: UN
