Nigeria: Government Issues First Eurobonds

The Nigerian government is raising money: the first sale of international bonds has started, which should bring a total of 2.2 billion dollars to the state coffers. Bonds maturing in 2031 with a coupon of 9.625 percent are expected to yield $700 million, and bonds maturing in 2034 are expected to yield $1.5 billion at a rate of 10.35 percent.

As the International Financing Review wrote, the order book for both bond issues exceeded $8.8 billion, while “initial prices for both maturities were well above 10 percent.” Proceeds from the issue, which will be listed in London and Nigeria, will be used to finance the West African country’s state budget: “Nigeria plans to raise a total of $2.2 billion from offshore debt markets to support ongoing macroeconomic reforms,” said Nigerian Finance Minister Wale Edun, according to whom “Nigeria has already raised $900 million in September in the first sale of domestic dollar bonds, in an effort to diversify its sources of funding.”

Meanwhile, in the context of inter-African economic cooperation in South Africa, a joint roundtable between Nigeria and South Africa was held in Cape Town, South Africa, to “explore ways of strengthening bilateral and regional trade.”  At the opening of the event, which was attended by institutions and entrepreneurs from the two countries, South African President Cyril Ramaphosa (pictured) spoke and emphasized the importance of the BRICS group of countries for the economic development of the African country. BRICS currently includes Egypt and Ethiopia, in addition to South Africa. “South Africa and Nigeria,” Ramaphosa said, “must work together to support infrastructure development on the African continent, explore ways to harness each other’s potential, finance industry, and conduct inter-African trade to make Africa competitive in other markets. We must explore the best way forward in various sectors, from water infrastructure to roads, as well as explore opportunities in other areas to improve the continent’s economic resilience,” said Ramaphosa, according to whom “African countries must improve their competitiveness in global markets by building the system.”