Nigeria has re-entered the global capital markets after a two-year hiatus, issuing $2.2 billion in Eurobonds to address its fiscal deficit. The bonds, denominated in US dollars, include a 6.5-year note priced at 9.625% and a 10-year note at 10.375%. With a peak order book of over $9 billion, the issuance reflects strong investor confidence in the country’s economic reforms. The proceeds will be allocated to budgetary support, addressing a record deficit driven by low crude oil output and weak tax revenues. Key international institutions such as JPMorgan Chase, Citigroup, and Goldman Sachs managed the issuance.
The bonds attracted a diverse pool of investors from multiple regions, underscoring renewed confidence in Nigeria’s economic policies. Listed on the London Stock Exchange, the Eurobonds were structured to appeal to both U.S. and international markets. Despite challenges like mounting debt servicing costs, Finance Minister Wale Edun and Central Bank Governor Olayemi Cardoso expressed optimism about the issuance’s success, highlighting it as a testament to ongoing reforms aimed at stabilizing and growing Nigeria’s economy sustainably.
Africa’s rising debt burden and Nigeria’s strategy to meet external financing needs are under global scrutiny. Experts, including the African Development Bank, warn of increasing risks associated with private debt. Nigeria’s Eurobond issuance aligns with a broader effort to manage external debt, which now accounts for over 35% of its total debt. As global economic pressures grow, the country’s ability to balance short-term borrowing with long-term development goals will remain pivotal.
