ABUJA (Sundiata Post) – The Senate on Tuesday approved President Goodluck Jonathan’s request to increase by 200 percent the amount to be raised through the Diaspora Bond from an initial $100 million to $300 million.
According to the report of the Joint Committee on Local and Foreign Debts and Finance on the subject matter, the amount will be raised from the International Capital Market (ICM).
Led by Senator Ehigie Uzamere (Chairman, Senate Committee on Local and Foreign Debts) and Senator Ahmed Makarfi (Chairman, Senate Committee on Finance), the 22-member joint committee recommended that the Senate do approve the said increase.
“The concept of raising funds through Diaspora Bond has been employed by several countries over the years with tremendous success. The issuance of the Diaspora Bond will afford the Diasporas the opportunity to invest in the development of the country, while earning good returns for their investments.
“The Committee believes the projects that the Federal Government has chosen to utilise the funds are (very) critical infrastructures that will impact on the economy positively,” Uzamere noted.
Sundiata Post recalls that upon resumption from its Christmas recess on Tuesday, January 21, 2014, the Senate received a letter from Jonathan on the aforementioned matter.
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Jonathan, who explained that the $100 million Diaspora Bond was part of the $8 billion approved by the National Assembly in the 2012-2014 Medium Term External Borrowing Plan, added that it is to enable the government raise funds from Nigerians in the Diaspora to finance development projects in priority sectors of the economy.
He said that the request for an increment was premised on the high level of interests in the Diaspora Bond.
“The process for the issuance of the bond has commenced, with the advertisement of requests for proposals for transaction parties for the offering. From engagements with Nigerians in Diaspora and the enquiries received since the publication of the requests for proposal, there is a high level of interest in the Diaspora Bond. There is an indication that the $100 million could be inadequate, relative to the demand expected from investors for the bond,” the President wrote.
Following the request, the Senate, at its sitting on Tuesday, February 4, 2014, considered the executive communication for an increase in the amount to be raised through the bond, and referred same to the Committee on Local and Foreign Debts for further legislative action.
Later in the year on Tuesday, October 21, 2014, the Senate referred the matter to a joint committee on Local and Foreign Debts and Finance, following a definite request from the President to raise the amount from $100 million to $300 million.
“The proposed increase in the Diaspora Bond is to fund critical infrastructures in the country. The proposed increase, it is believed, will accommodate a greater number of Nigerians in the Diaspora, who has interest to invest in the development of the country.
“The provisions of sections 41, 42, 44 and 47 of Fiscal Responsibility Act 2007 prescribed conditions for borrowing and verification of compliance limit upon which the approval of the National Assembly will be premised,” Uzamere added.
Meanwhile, the Senate, on Tuesday, adjourned sittings till the next two weeks, giving room for members, who will be contesting for reelection into the Eight Senate and other elective positions to participate in the National Assembly.
Sundiata Post reports that the senators are expected back at the Red Chamber three days, after the forthcoming Presidential and National Assembly on Saturday, March 28.