Nigeria’s Federal Government has made an unprecedented step forward by issuing its very first domestic bond denominated in foreign currency for the sum of $900m. This landmark announcement was made by Minister Wale Edun, who is also the Coordinating Minister of the Economy and Finance, on Tuesday.
Investor confidence in Nigeria’s economic stability and growth potential is reflected in the oversubscription of this bond. Despite economic challenges, Edun underlined that it showed the government’s commitment to funding diversification and financial inclusion promotion.
The first segment of a $2bn bond programme registered with the Securities and Exchange Commission is made up of a $500m domestic FGN US Dollar Bond, having a five-year maturity period and a 9.75% coupon rate. The design permits the total absorption of oversubscriptions up to the entire $2bn programme limit.
President Bola Ahmed Tinubu approved that proceeds from the bond are allocated to vital sectors of the economy. A diverse set of investors, including Nigerians both at home and abroad, as well as institutional investors, were drawn to purchase this bond.
Patience Oniha, Director-General of Nigeria’s Debt Management Office, considers this success to be a turning point moment in her country’s economic progress. She went on to explain how advanced Nigeria’s domestic fixed-income market had become over time.
