The Federal Government has enlisted the expertise of leading global investment banks, including Citibank NA, JPMorgan Chase & Co, and Goldman Sachs Group Inc., to guide its forthcoming Eurobond issuance.
In addition, Standard Chartered Bank and a financial adviser firm Chapel Hill Denham have been appointed to advise on this venture, according to The Punch.
The intention of Africa’s leading oil producer country to regain its relationship with the world finance markets in order to strengthen its fiscal budget is underlined by this development, as reported by Bloomberg and sources close to the transaction.
The report said that the size of a Eurobond offer, expected before June, has not yet been determined, according to people who requested anonymity because they were not authorised to comment on this subject.
It further added that the nation might aim to accumulate up to $1bn in international loans throughout 2024.
This external funding is critical 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.
In December last year, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, hinted at the possibility of issuing Eurobonds in the course of the year, if the interest rates were much lower, noting stating that major issuers have informed the country of the possibility this year.
He said, “It is a matter of discussion at the moment, but we think we will get the support because we are continuing with our reforms.”
President Tinubu has launched a vigorous policy aimed at Restoring the Foreign Investment Flow to Nigeria since he assumed office in May of 2023.
These initiatives range from implementing two devaluations of the naira in order to foster an exchange rate flexibility regime, reducing differences between central bank policy rates and yields on government securities, to controversy about eliminating fuel subsidies.
