Nigeria Launches $500 Million Dollar-Denominated Bond Sale on Local Market
Yesterday, Nigeria launched a $500 million dollar-denominated bond sale on its local market. Abuja is targeting its diaspora and foreign investors who hold dollars in an effort to attract foreign currency resources.
This initiative is part of the plans to stabilize the local currency, the naira (1 naira = 0.0019 dinar), by attracting dollars held by Nigerians living abroad and international investors who support the government's reform plan.
However, the duration of the bond and the closing date of the sale have not been disclosed.
To reassure investors, the Nigerian Ministry of Finance has assured that its budget management has improved and its interventions to reduce inflation are already yielding results. Nigeria's overall inflation rate decreased in July for the first time in over a year, dropping from 34.19% in June to 33.40% annually.
Like several countries on the continent, Nigeria's sovereign rating does not allow it to issue eurobonds. Almost all African issuers have faced difficulties on international capital markets, particularly with regards to the principal of their debt.
In June, the World Bank approved a total loan of $2.25 billion to Nigeria to help stabilize its economy following reforms and increase support for the poor.
Wouldn't this idea be useful for Tunisia? Launching a new exchange code and such an operation would be a great first and a beautiful publicity stunt for the country's renewal. To those who will listen...
