$900 Million Raised by Nigeria in its Primary Domestic Dollar Bond Sale in a bid to Revamp Economy in the Circumstances of Dollar Scarcity

By Abdul Rahman Bangura-

Photo Credit: Tribune online

NEW AFRICA BUSINESS NEWS (NABN) Freetown, Sierra Leone- This drive is path for Nigeria’s strategy to diversify funding sources and curtail hope on international capital markets, where elevated yields pose crucial difficulties.

The Continent’s biggest economy, which has struggled with severe dollar shortages, sees this bond sale as a much-needed source of hard currency.

The Central Bank of Nigeria has already been forced to devalue the Naira twice in the past year.

The five-year bond, which emanates with a 9.75% coupon rate, was highly attractive to investors, achieving a 180% subscription rate, as stated by the Africa Finance Corporation (AFC). Executive Director Banji Fehintola underscored the significance of African nations steering inward to tap into the Continent’s domestic capital to finance their own development.

While countries like Kenya have turned to international capital markets, paying over 10% interest on bonds, Nigeria is avoiding such high costs by concentrating on local and diaspora investors. Proceeds from the bond will be invested in critical sectors of Nigeria’s economy.

The bond ear-marks local investors, pension funds, and Nigerians abroad, establishing a more steady investment environment for the local Naira currency. Investors will have the chance to trade the bond on two local exchanges once it is registered.

For New Africa Business News (NABN) Abdul Rahman Bangura Reports, Africa Correspondent