Home Economy 2017 Budget: Nigeria To Float $2.5bn Eurobond
2017 Budget: Nigeria To Float $2.5bn Eurobond

2017 Budget: Nigeria To Float $2.5bn Eurobond

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On Thursday, September 28, 2018, the Debt Management Office (DMO), said Nigeria’s Federal Government would float an Eurobond to raise $2.5 billion before the end of 2017.

Ms Patience Oniha, the DMO Director-General, made this known at the 2017 Nigerian Debt Capital Markets Conference and Awards, organised by the FMDQ OTC Securities Exchange in Lagos.

Oniha said that the borrowing would enable the country to bridge the gap in the 2017 budget currently facing liquidity problem to finance some capital projects.

She said that the proposed Eurobond issuance would complement the 1.5 billion dollars raised from the international market in March 2017.

Oniha said the nation’s Treasury Bills portfolio presently stood at N3.7 trillion, adding that DMO planned to refinance it with foreign borrowing to reduce pressure on the domestic market.

She said that Nigeria needed to build stronger and responsive institutions that could support infrastructure agenda of the government.

Oniha said that government had proposed to channel new borrowings into the capital investments instead of consumption.

“The debt ratio is not tangible and adequate components of borrowing, because it is not going into funding others than capital investment.

“Let us channel new borrowings into capital investment instead of consumption,” Oniha said.

On the N100 billion Sukuk Bond, the director-general said that the Federal Government had identified 25 road projects to be funded with the proceeds.

She said that among the roads listed were Ore-Sagamu Road, Kaduna Bypass, Enugu- Port-Harcourt Road, Kano-Maiduguri and Benin-Lokoja Road, among others.

According to her, government has also decided to finance other trunk A roads which will provide the needed support to accelerate the nation’s developmental goals.

She said that Nigeria should build stronger and responsive institutions that could support infrastructure agenda of the government.

“We need to build the business in terms of products that meet specific needs of investors,” she said.

Oniha said that the acceptance of the offer was an indication of the viability of the instrument as an investment option, as well as a demonstration of utmost faith in the economy.

She also commended the Federal Government for the policy support that led to the success of the initial offer.

The director-general said that it had been encouraged to introduce new instruments to aid government’s funding.

She said investment experts were optimistic that with the issuance, a new instrument has been introduced to the Nigeria’s capital market.

Oniha said that the new instrument would add to the variety of products available for domestic issuers and investors.

Investors in the offer, which closed on Sept. 22, with a seven-year tenor, included pension funds, banks, fund managers and retail investors.

The News Agency of Nigeria (NAN) reports that the N100 billion Sukuk Bond issued by the Federal Government was oversubscribed by about N6 billion.

The seven-year Sukuk attracted a subscription of N105.88 billion according to the DMO.

Source: NAN

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Ikenna Asomba

Ikenna Asomba is the Editor of Diplomatic Watch powered by Conduit Communications Limited, where he serves as Head, Media. He has knack for Developmental Journalism, a skill he has used to influence decisions of policy makers towards a better life for the people.

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