The Federal Government has said that it is exploring offshore debt option as a means of reducing 2018 budget deficit gap and by implication, improving the performance of the budget.

One of the options is to raise $2.8 billion loans from overseas creditors with a view to reducing the cost of borrowing to the minimal level.

The Director General of the Debt Management Office (DMO), Patience Oniha, told Reuters that offshore loans remained the most viable option to the country now in its drives to raise funds at minimal costs for growth and achieve debt sustainability.

To confirm that the plan is already being pursued, IFR reported that the DMO had forwarded a request for a proposal to banks for an international bond offering, 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.

Earlier this year, she hinted that the debt management agency would explore capital markets or concessionary loans from the World Bank, amongst other financing options, to fund the 2018 budget.

In February, Nigeria had raised $2.5 billion through a dual-tranche Eurobond offering in through the sale of a 12-year Note at 7.1 percent to raise $1.25 billion and a 20-year tranche at 7.7 percent.

It would be recalled that the country had approved a three-year debt plan in 2016 to borrow more from abroad so that 40 percent of its loans would come from offshore as a fiscal strategy to lower borrowing costs.

Official data provided by the DMO on the nation’s debt structure indicated that about 23 percent of the nation’s debt stock is from offshore, representing about 16 percent growth over the pre-2016 debt plan value.