Aduragbemi Omiyale
By Aduragbemi Omiyale
The plans by Nigeria to go to the international debt market to borrow $950 million through Eurobond sale will not happen as earlier expected.
This is because the country, the largest economy in Africa, is finding it difficult to get better pricing for the debt instrument.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed that the federal government is suspending the exercise due to unfavourable market conditions during the time frame approved for the fundraising.
“We were not able to do that (issue the Eurobond) because the market pricing was not good and also the approval period for us has closed.
“The approval period was up to May 31, 2022. So, we are not going to be able to take that one anymore,” the Minister was quoted as saying by Bloomberg on the sidelines of the Islamic Development Bank meetings in Egypt.
The federal government had planned to raise $950 million from offshore investors to support its budget deficits. But with the latest development, it is not certain if the country will shift its attention to domestic investors.
A similar situation happened during the COVID-19 period when borrowing at the international market was impossible and the government turned to the local debt market to raise funds to plug its fiscal deficits.
There had been eyebrows raised over plans to sell the $950 million bonds to allegedly pay fuel subsidies and others. This may have put prospective investors on red alert.
Another possible factor may have been the involvement of the Central Bank of Nigeria (CBN) in partisan politics when he attempted to contest the 2023 presidential election while still in office. It was reported that a group of organisations purchased the presidential forms of the All Progressives Congress (APC) for him.
