The Senate yesterday gave President Goodluck Jonathan the nod to raise $300 million Diaspora Bond from the International Capital Market.

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This approval comes over one year after President Jonathan sought the approval of the Senate to raise the fund.

The presidency increased the bond request from initial $100 million to $300 million.

Chairman, Senate Committee on Local and Foreign Debts, Senator Ehigie Uzamere, presented the report of the joint Committee on Local and Foreign Debt and Finance which recommended that the Senate should approve the request.

The joint Committee was mandated by the Senate to consider the request for the increase in the amount from $100 million to a maximum of $300 million to be raised through the Diaspora Bond from the International Capital Market.

Uzamere said that the Senate at its sitting on February 4, 2014 considered Executive Communication from Mr. President for an increase in the amount to be raised through the Diaspora Bond from the International Capital Market and referred same to the joint committee.

He noted that the proposed increase in the Diaspora Bond is to fund critical infrastructure in the country.

He added that the proposed increase is believed will accommodate a greater number of Nigerians in the Diaspora who have interest to invest in the development of the country.

Uzamere informed the Senate that the provisions of Sections 41,42,44,and 47 of the Fiscal Responsibility Act, 2007 prescribed conditions for borrowing and verification of compliance limit upon which approval of the National Assembly will be premised.

He noted that based on the submissions by the Director General, Debt Management Office and several interactions the joint committee had, the committee observed as follows:

That the $100million Diaspora Bond as passed in the Borrowing Plan 2012-2014 is too small considering the life of Nigerian Diaspora

That the larger and present amount of $300 million is consistent with the Public Debt Management Strategy.

That with the dwindling revenue from crude oil sale, it has become necessary to diversify sources of funding for government.

That the Diaspora Bond is necessary to create more space in the domestic market for other borrowers particularly, private firms.

That the Federal Government plans to utilise the proceeds of the Diaspora Bond in the construction of key capital projects in priority sectors of the economy including the second Niger bridge, the Lagos-Ibadan expressway and infrastructure for the Abuja Medical City.

The joint committee concluded that the concept of raising funds through Diaspora Bond has been employed by several countries over the years with tremendous success.