(Ecofin Agency) - The Nigerian Minister of Finance, Kemi Adeosun (photo), has revealed plans by the Federal government to refinance $3 billion worth of short-term treasury bills denominated in the local currency with dollar borrowing of up to three years’ maturity.

The Minister who disclosed this after the weekly Federal Executive Council (FEC) meeting held on Wednesday in Abuja, explained that the government would issue dollar debt as the naira treasury bills gradually mature. She, however, did not provide a time frame for this.

According to Adeosun, the move was in line with efforts to restructure the debt portfolio into longer term maturities by borrowing more offshore and less at home. This would also support private sector access to credit, to boost the economy.

“As the economy recovers and grows we will be in a much better position to repay instead of just rolling over the debt. We are not increasing our borrowings, we are simply restructuring -- instead of owing naira, we will be owing dollars,” she said.

The debt profile change would also have a positive impact on the value of the naira “because it means that $3 billion will be coming into our foreign reserve,” the minister added.

In addition, the government has also approved its medium-term expenditure framework for 2018-2020 and revised its growth forecast for next year downward.

Udoma Udo Udoma, minister for budget and national planning said after the cabinet meeting that the government approved a slightly different growth prediction of 3.5% for next year, against the 4.8% it announced in its strategy paper.

Anita Fatunji