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Nigeria’s currency the naira may appreciate as Bank of New York (BNY) Mellon Corp. announced it will sell global depositary notes (GDNs) backed by local-currency Nigerian sovereign debt, offering investors access to the high yields offered by Africa’s most populous economy.
The notes sold along with Standard Bank Group Ltd. will be eligible for settlement through Euroclear and Clearstream, the oldest US bank said in a statement on Wednesday.
Nigeria on June 4 sold 182-day bills to yield 18.5% and its benchmark bond due 2033 was quoted on Wednesday at a yield of 19.23%.
This program will help unlock “investment potential across Africa” and support capital market development, said Chris Kearns, global head of depositary receipts at BNY Mellon.
The program to lure investors to Nigerian debt follows President Bola Tinubu’s moves — including scrapping fuel subsidies — to revive economic growth and improve government finances.
Nigerian foreign exchange reserves have increased, inflation has moderated and the naira has stabilized, with the gap between the official and unofficial rates narrowing.
The notes will offer “a simplified and accessible entry point into the Nigerian market — presenting investors with a compelling opportunity to invest in one of Africa’s most dynamic economies,” said Sola Adegbesan, head of Africa regions & international global markets at Standard Bank.
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