The Federal Government has appointed Standard Chartered Bank and the Lagos-based financial advisory firm chapel Hill Denham to consult on the expertise of lending global investment banks enlisted by the federal government which include Citibank NA, JPMorgan Chase &Co, and Goldman Sachs Group Inc. to guild its forthcoming Eurobond issuance.
The Eurobond issue which would be the first since 2022, marks the country’s return to the international bond market after a two-year pause. In March 2022, the country raised $1.25 billion through Eurobond issuances.
According to Bloomberg and informed by sources close to the transaction, underscores the intent of Africa’s leading oil-producing nation to re-engage with global financial markets in order to bolster its fiscal budget.
The report stated that the size of the Eurobond offer which is expected before June is yet to be determined, the people who requested anonymity because they weren’t authorised to comment publicly on the matter, said.
It further added that the nation might aim to accumulate up to $1bn in international loans throughout 2024. This external funding is crucial for Nigeria as it seeks to finance a substantial budget deficit outlined in President Bola Tinubu’s N28.8 trillion ($18 billion) spending blueprint for 2024, targeting a fiscal shortfall of N9.8 trillion, or 3.8 per cent of its GDP.
The deficit is expected to be bridged through local and international borrowings and assistance from global financial institutions.
Last year December, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, hinted that Nigeria was contemplating issuing Eurobonds later in the year if the rates are considerably lower, stating that major issuers have informed the country of the possibility this year.
He noted, “It is a matter of discussion at the moment, but we think we will get the support because we are continuing with our reforms.”
Since assuming office in May 2023, President Tinubu has aggressively pursued policies to revitalise foreign investment inflows into Nigeria. These initiatives range from implementing two devaluations of the naira to foster a more flexible exchange rate regime, narrowing the disparity between the Central Bank’s policy rate and the yields on government securities, to the controversial elimination of fuel subsidies.
