Nigeria to Issue New Eurobond by June

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As part of efforts to strengthen the country’s foreign exchange (forex) position, the Nigerian government is set to issue a new Eurobond before the end of the second quarter of this year.

Sources that are well acquainted with the proposed transaction said since 2022, the government has hired foreign investment banks including Citibank NA, JPMorgan Chase & Co, and Goldman Sachs Group Inc to advise it on its first Eurobond issue.

Bloomberg reported that the size of the Eurobond offer that is expected before June, is still unknown. According to the report, the government is likely to raise as much as $1 billion in external borrowing this year to meet its spending demands.

The government has also engaged Standard Chartered Bank and Lagos-based Chapel Hill Denham to serve as advisers over its first Eurobond issue.

President Bola Tinubu had earlier approved a N28.8 trillion ($18 billion) spending plan for 2024 and is targeting a budget deficit of N9.8 trillion, or 3.8 per cent of Gross Domestic Product(GDP), which will be funded by borrowings from local and international investors as well as multilateral lenders.

As governments seek to raise money after years of being priced out of international debt markets because of rising global interest rates, emerging-market bond sales are seen to be picking up again.

Countries such as Benin, Ivory Coast and Kenya have successfully issued Eurobonds this year, and Nigeria is looking to follow suit.

With his series of reforms such as devaluing the naira twice as the country moves toward a more flexible exchange rate, reducing the gap between the central bank’s policy rate and yields on the short-dated paper it sells at auctions, removing costly fuel subsidies, President Tinubu has been seeking to attract foreign investors back into the economy since coming into office in May 2023.

However, these actions have raised several concerns among Nigerians as the nation is currently experiencing the highest inflation ever. Standard of living has skyrocketed, and purchasing power has become really low. The question at the top of the people’s minds is how invested is the President in the people’s welfare?

 

 

 

 

 

 

 

 

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