Senate Approves Issuance of $2.786bn Eurobond to Fund 2018 Budget

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*Moves against excessive bank charges

Deji Elumoye in Abuja

The Senate Tuesday approved the issuance of $2.786 billion from the International Capital Market to part finance the 2018 budget.

It also approved the issuance of $82.54 million to refinance the balance of $500 million matured Eurobond in the International Capital Market.

This is sequel to the presentation at plenary of the report on the implementation of the new external capital raising of $2.786 billion from the International Capital Market approved in the 2018 Act by the Chairman of the Senate Committee on Local and Foreign Debts, Senator Shehu Sani.

In his five-page presentation, Senator Sani said the committee emphasised the urgent need by the federal government to reduce its request for more external borrowing “and source for other means of generating revenue internally”.

The need for government to step up internal revenue generation, according to Senate resolution on the issue as read out by Senate President, Bukola Saraki, was informed by the need to avoid “a cleverly managed reconquest of our country through a debt- overhang”.

The Senate also observed that the issuance of the bonds will contribute to the implementation of the Debt Management Strategy ” which seeks to reduce the cost of borrowing, lengthen the maturity of the public debt stock, free up space in the domestic market for other borrowers and will help to increase Nigeria’s external reserves.”

“We also belief that the external capital raising of $2.786 billion will result in a portfolio mix of Domestic Debt – 68% and External Debt- 32%, which is an improvement over the ratio of 70:30 as at June 30, 2018. This brings the debts portfolio mix closer to the target of 60:40.”

The upper legislative chamber also emphasised that the issuance of the Eurobond was for the part financing of the 2018 budget with particular interest to finance key infrastructure projects in the 2018 budget.

The Senate also Wednesday urged the Central Bank of Nigeria (CBN) to suspend the Automatic Teller Machine (ATM) card maintenance charges being deducted from customers account.

This resolution followed a motion on the illicit and excessive bank charges on customers’ accounts, sponsored by Senator Olugbenga Ashafa.
The Senate also called on commercial banks operating in the country to configure their machines to dispense up to N40,000 per withdrawal pending the outcome of the investigation by the Senate committees tasked with investigating the excessive and illicit bank charges.

Other Senators who contributed to the debate, called on banks to review their charges.

On his part, Senator Emmanuel Bwacha said “Banks declare profits and you wonder where these profits are coming from — it’s from the sweat of the common man. Let us come up with a law that puts banks on their toes.”

“It won’t be out of place to institute a committee that will call on the CBN to tell us what these charges are about. The Senate by fiat should abolish charges if they can’t be verified,” said Senator Bala Ibn Na’Allah.

Also contributing, Senator Kabiru Gaya declared that “the Senate must take a serious stand on this issue. Nigerians are really suffering. The banking system is not encouraging. I had an issue, took it to the bank and was refunded but how many Nigerians can do this? The issue needs to be addressed.”

The Senate further directed its Committees on Banking, Insurance & other Financial Institutions and Finance to conduct an investigation into the propriety of ATM card maintenance charges in comparison with international best practices and report back to the Senate.

It directed the aforementioned committees to invite the Governor of the CBN to appear before it to explain why the official charges as approved by the CBN are skewed in favour of the banking institutions as against the ordinary customers of the banks.

The Senate also enjoined the Consumer Protection Council (CPC) to look into the various complaints of excessive and unnecessary charges by banks in the country.

Saraki in his remarks said: “this is a motion that affects the lives of every Nigerian — irrespective of what part of the country you come from or whatever political affiliation you might have. This is why we are here – to always defend and protect the interests of our people According to him, the Senate must work to ensure that the Senate’s resolutions on the excessive bank charges goes beyond the debate stage, so that whatever action the Upper Legislative Chamber takes, would come into effect.

“This Senate has done this many times before; when there was a hike in the mobile telecommunication data charges, we intervened and put an end to that. When there were discrepancies and increases in electricity tariffs we also took action. We have done this on a number of similar cases. Therefore, on this, I want us to take effective resolutions,” Saraki further said.