By Collins Nweze
Nigeria plans to difficulty $3 billion or extra in Eurobonds as worldwide capital markets (ICM) open up and rates of interest decline.
Nigeria had deliberate a Eurobond difficulty early final 12 months after its sixth sale in 2018, nevertheless it determined to defer the 2020 sale as a result of market turmoil brought on by the COVID-19 pandemic.
Final month, the Debt Administration Workplace (DMO) stated the federal government was seeking to choose advisers.
“The plan is to boost $6.183 billion from a mixture of sources,” President Muhammadu Buhari stated in a letter to parliament in search of approval for the debt increase.
“From latest developments within the ICM, it’s now attainable for Nigeria to boost funds within the ICM. We estimate that Nigeria might be able to increase $3 billion or extra, however no more than $6.183 billion in a mixture of tenors between 5 to 30-years.”
Nigeria emerged from its second recession since 2016 within the fourth quarter, however development is fragile. The federal government expects a 2021 price range deficit of 5.60 trillion naira to be financed largely from international and native borrowings.
Buhari stated it wished to reasonable debt service prices by accessing comparatively cheaper funds overseas, particularly as world rates of interest fall under 2020 ranges whereas native charges start to rise.