FG Unveils Fresh Plans To Borrow Through Eurobond

Amidst long-standing accumulated debts, the Federal Government of Nigeria has again, announced plans to borrow through Eurobond, marking its return to the international bond market since its last issuance in March 2022.

To actualize this, the government has enlisted the services of leading global investment banks, including Citibank NA, JPMorgan Chase & Co, and Goldman Sachs Group Inc., along with Standard Chartered Bank and the Lagos-based Chapel Hill Denham, as advisors.

According to Punch, the upcoming Eurobond issuance, expected to occur before June, represents a pivotal moment for Africa’s largest oil-producing nation as it seeks to re-engage with global financial markets.

According to the Nigerian government, the initiative is part of a broader strategy to finance the significant budget deficit outlined in President Bola Tinubu‘s N28.8 trillion ($18 billion) spending plan for 2024, which projects a fiscal shortfall of N9.8 trillion, or 3.8 percent of the GDP.

The exact size of the Eurobond offer has yet to be determined.

However, sources close to the transaction, who preferred to remain anonymous, told the platform that Nigeria could aim to secure up to $1 billion in international loans throughout 2024.

This external financing is deemed critical for the country to manage its ambitious fiscal deficit. The shortfall is expected to be covered through a mix of local and international borrowings, alongside support from global financial institutions

The exact size of the Eurobond offer has yet to be determined.

However, sources close to the transaction, who preferred to remain anonymous, told the platform that Nigeria could aim to secure up to $1 billion in international loans throughout 2024.

This external financing is deemed critical for the country to manage its ambitious fiscal deficit. The shortfall is expected to be covered through a mix of local and international borrowings, alongside support from global financial institutions.

In a related development, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed that the decision to issue Eurobonds was influenced by the potential for lower interest rates and ongoing economic reforms.

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