President Muhammadu Buhari yesterday requested the House of Representatives to approve an increase in the amount to be raised through the Diaspora Bond from the International Capital Market from $100 million to $300million.
According to Buhari, the Senate in the 7th Assembly approved the request which emanated from former President Goodluck Jonathan’s regime, but the House did not.
“Without the resolution authorising the increase in the proposed issuance to $300 million, Nigeria would be constrained by our own laws and the requirements of International Capital Market (including the regulations of the audited States’s Security and Exchange Commission) to issue only $100 million,” he said.
The letter addressed to Speaker Yakubu Dogara further reads: “The Honourable Speaker may wish to recall that the Federal Government in its efforts to mobilise capital to finance critical infrastructure while diversifying its funding sources and encouraging the Nigerian Diaspora to contribute to the development of the economy through investment in Capital Projects in priority sectors of the economy, sought and obtained the approval of the National Assembly (NASS) in March, 2013 to issue a $100 million Diaspora Bond to Nigerians in Diaspora.
“In furtherance of this development and in conformity with the law, the former president approved and submitted a request to the two chambers of the NASS in December 2013 for an increase in the issuance amount from $100 million to $300 million.”
Buhari said the request to the NASS was in line with Section 21(1) of the Debt Management Office (Establishment etc) Act 2003, which he quoted as stating 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 president reiterated the three reasons given the 7th NASS for an increase to $300million which he said are: “The huge amount of capital needed to abridge the infrastructural gap thereby supporting growth and development; the need to optimise the cost of issuance relative to the amount proposed to be raised, since the some costs, such as marketing expenses, fees to some transaction parties and the preparation of a prospectus will be the same, regardless of the amount issued; and the high interest being shown by the a Nigerian Diaspora in the proposed bond.”