Federal government approves $500 million Eurobond for 2017 Budget

The federal government has approved $500 million (N153.55 billion) Eurobond to fund the 2017 budget.
The federal government said next steps in relation to the issuance of the bond which will be sourced from the international market will be released later.

Speaking after the Federal Executive meeting on Wednesday, March 29, the minister of finance Kemi Adeosun said the government has issued a directive to contractors and those doing business to ensure that name of company directors are listed on their letter headed papers.

We gathered that this is part of government ongoing reforms to ensure tax authorities are able to trace and collect the required taxes from companies doing businesses with government.

She said, the secretary to the government of the federation has also been directed to issue a memo to all ministries, departments and agencies to keep them abreast with the law.

Adeosun said: “FEC gave a directive 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 but what we have seen is that many bodies that are transacting business with government simply have the names of the company and no details of who the directors are.”

“So for tax purposes, it is quite difficult to trace them, so 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,” Adeosun said.

She further noted that the auditor general has been directed to make sure payments are not made to those who default on the law.

“And equally the Accountant General has been 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 and making from the government are paying the right taxes,” she said.

Recall that the Nigerian Senate had earlier approved a request by President Muhammadu Buhari to raise an additional $500,000 million from the international capital market.

The fund the Nigerian government said will fund the deficit of the 2017 budget.

The vice president Yemi Osinbajo who wrote to the Senate on behalf of the president on the matter said: “The senate may wish to note that the proceeds of the Euro Bond are to be used as funding sources to finance the budget deficit, including capital expenditure projects as specified in the 2016 Appropriation Act.”