The Federal Government plans to raise $2.8bn of debt offshore as part of its 2018 budget and will explore all options to lower costs, the Director-General, Debt Management Office, Patience Oniha, has told Reuters.

The government has laid out plans to borrow abroad even though interest rates are rising in the United States, which could see Nigeria pay a higher premium on this occasion compared with its most recent debt sale in February.

Nigeria, which left recession last year, approved a three-year plan in 2016 to borrow more from abroad so that 40 per cent of its loans would come from offshore in an attempt to lower borrowing costs.

It now has around 23 per cent of its debt from abroad, up from 16 per cent when it approved the plan.

The debt office has sent a request for a proposal to banks for an international bond offering, the IFR reported, citing sources.

“We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” Oniha told Reuters, without giving details.

The National Assembly needs to approve the new borrowing.

Oniha in January said the DMO could tap capital markets or concessionary loans from the World Bank and would consider funding options after the 2018 budget had been approved.

President Muhammadu Buhari had on June 20 signed a record N9.12tn budget for 2018 into law, aimed at fostering growth before elections next February, in which he will seek a second term.

Growth rates in Nigeria have bounced back since the third quarter of 2016, when a recession, its first in 25 years, hit bottom. It exited that contraction last year, largely due to higher oil prices, with the country relying on crude sales for much of its revenue.

owever, growth slowed in the first quarter of 2018 for the first time since pulling out of recession as its non-oil sector struggled.

Nigeria raised $2.5bn through a dual-tranche Eurobond offering in February, selling a 12-year note at 7.1 per cent to raise $1.25bn and a 20-year tranche at 7.7 per cent.

The February deal was the second international bond sale in less than three months, after the debt office raised $3bn through an offering of 10- and 30-year bonds in November.