By Chijioke Ohuocha
LAGOS (Reuters) - Nigeria will increase the amount it borrows overseas to around 40 percent of all debt over the next three to five years, from 12 percent currently, to lower its cost of funds, the head of the debt office said on Monday.
DMO Director General, Abraham Nwankwo, said he expected Nigeria's debt to GDP ratio to fall to 17 percent over the same period from 21 percent, as Africa's second-biggest economy switches into cheaper foreign debt.
Nigeria is one of several African countries seeking to ride the wave of cheap money generated by ultra-loose monetary policy in the West and Japan.
"Nigeria has developed a medium-term debt strategy ... which will improve the portfolio mix and reduce our average cost of funds," Nwankwo told Reuters in a telephone interview.
Nwankwo said foreign debt was currently 800 basis points cheaper than domestic debt, noting that a proposed $1 billion Eurobond issue was part of the strategy to move towards cheaper foreign loans.
Total domestic debt stood at 6.49 trillion naira at end-March, 2013 while foreign debt was $6 billion. "We have to look at the optimal portfolio mix, cost structure, market development and source of funding," Nwankwo said.
Source: http://news.yahoo.com/nigeria-says-switching-foreign-debt-lower-costs-115443070.html
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