The Federal Executive Council on Wednesday approved the country’s $500m Eurobond, which was recently endorsed by the National Assembly.
The Minister of Finance, Mrs. Kemi Adeosun, disclosed this to State House correspondents at the end of the meeting of the council presided over by President Muhammadu Buhari.
She was joined at the press briefing by the Minister of Information and Culture, Alhaji Lai Mohammed; and the Minister of Interior, Abdularahman Dambazzau.
“The other memo was the $500m Eurobond. Remember that the National Assembly had approved it and the council was also required to approve it. That was done,” she said.
Adeosun said the council also approved the ratification for the establishment of the West African Tax Administration Forum, which is a platform to promote mutual agreement and cooperation among West African tax authorities.
She said Nigeria was the host of the body, adding that the effect of the approval was that there would be better information sharing and cooperation between countries within West Africa on tax administration as part of Nigeria’s tax reform efforts.
The minister explained, “As you know, Nigerians own properties in Ghana and other neighbouring countries. Now, for tax purposes, they will be able to have access to that type of information. Linked to that is the directive of the FEC to the SGF to remind companies that there is an existing provision in the law that companies are supposed to have on their letter headed papers the names of their directors and their registered offices
“What we have seen is that many bodies that are transacting business with the government simply have the names of the companies and no details of who the directors are. So, for tax purposes, it is quite difficult to trace them. The SGF will be issuing a circular reminding agencies and ministries of government that it is the law and therefore they are at liberty not to treat any document that doesn’t comply with the law
“The Accountant-General of the Federation is also being advised that payment will only be effected to companies that are fully in compliance with the law just to make sure that all those who are doing business with government are paying the right taxes.”
Dambazzau said the council approved the procurement of 15 water-carrying vehicles for the Federal Fire Service in an attempt to further revamp the service, which has experienced dearth of equipment for a long time.
He said the vehicles would cost the government N403m that would be taken from the N5.5bn allocated for firefighting equipment in the 2016 budget.
Meanwhile, the Federal Government on Wednesday said that the $500m Eurobond would be issued to investors at a yield of 7.5 per cent under its $1.5bn global medium term note programme.
A statement from the Director of Information in the Ministry of Finance, Salisu Dambatta, said that the new issuance would be consolidated and form a single series with the country’s existing $1bn bond of 7.875 per cent yield, which was issued on February 16.
The statement explained that the terms and conditions of the bond would be identical to those of the original notes, adding that proceeds of the bond would be used to fund capital expenditure in the 2016 budget.
The successful pricing of the Eurobond, it added, demonstrated continued strong market appetite for Nigerian securities.
Despite continued volatility in emerging and frontier markets, the pricing shows confidence by the international investment community in Nigeria’s economic reform agenda, the statement added.
Commenting on the successful pricing, the Minister of Finance, Mrs. Kemi Adeosun, said the proceeds would be used to fund capital projects contained in the 2016 budget.
The statement quoted her to have said, “The proceeds from this additional note issuance will go towards funding capital projects in the 2016 budget. Infrastructure spending is at the heart of our National Economic Recovery and Growth Plan, which was released earlier this month and guides how we will deliver the urgent reform our economy needs between now and 2020.
“Resetting the Nigerian economy is essential in order for us to deliver sustainable long-term growth.”
The statement also quoted the Director-General, Debt Management Office, Dr. Abraham Nwankwo, to have said, “Following the success of our $1bn note issuance in February, Nigeria is delighted to have increased our 2017 Eurobond programme to $1.5bn and to have secured additional $500m.
“Nigeria is keen to take advantage of favourable market conditions and investor appetite for Nigerian debt to complete our foreign borrowing programme for the 2016 budget and deliver further funds for vital capital projects.”
Citi and Standard Chartered acted as Joint Lead Managers, while Stanbic IBTC served as the financial advisers on the issue, according to the statement.
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