FG to raise $500m in domestic foreign currency bonds

• Published On: 25 July 2024 at 18:28

The federal government plans to issue $500 million in foreign currency-denominated bonds in three to four weeks.

This was revealed by Wale Edun, Minister of Finance and Coordinating Minister of the Economy, during a quarterly press briefing in Abuja titled 'Economic Recovery and Growth: Progress and Prospects 2024,' according to Nairametrics.

He stated, "We have an open exchange rate system; it is not unlawful, and so we have the issuing of a dollar-denominated instrument that is neither dependent on the financial architecture of the Western world, nor on the type of architecture that you use to raise Eurobonds.

"We're using the Nigerian financial system, the Securities and Exchange Commission (SEC), the banking system, and investment bankers to issue $500 million in the first instance, which will attract foreign currency held by Nigerians abroad as well as anyone else who supports President Bola Tinubu's macroeconomic reform efforts."

"That issue presents a challenge to the best and brightest in the financial markets. It is scheduled to open in the next three to four weeks."

Regarding the idea of issuing Eurobonds, Edun stated unequivocally that, until the outcome of the domestic bonds denominated in foreign currencies, the government has no plans to pursue this course.

He stated, "Right now, depending on the success of that issue, there is no discussion of going to the international markets to raise the eurobond.

"This is one of the alternatives we have. The marketplaces are open to us. Our ratings and performance merit.

"The market is accessible to us, but we prefer to challenge Nigerians to bring their money home and be a part of the Nigerian reform success story, which we believe is where the economy is headed.

"Although these are extremely early phases, we are on the correct track. We've turned a corner."

It was previously reported that the federal government plans to begin issuing domestic bonds mostly in foreign currencies in the second quarter of this year.

The Minister of Finance unveiled the federal government's proposal to issue foreign exchange bonds to Nigerians both domestically and internationally.

However, Edun explained that the delay in releasing the bonds was due to the government's desire to boost trust in its economic policy and win over those who are sceptical of its initiatives.