Nigeria Raises $1.25bn through Eurobonds as Public Debt Hits N41.026trn

Nigeria has issued $1.250 (N520 billion) billion seven-year Eurobond in the International Capital Market (ICM), being the first African country to access the ICM in 2022.

This is just as the Debt Management Office (DMO) has revealed that Nigeria’s total public debt stock, comprising the federal government, Federal Capital Territory (FCT), states and local governments stood at N39.556 trillion as at December 31, 2021.

In addition, the DMO disclosed that the federal government has so far borrowed about N950 billion from domestic sources to finance the N6.39 trillion deficit in the 2022 Budget.

When the fresh Eurobond issued by the country is added to its debt position as of December 31, 2021 and the N950 billion it had borrowed from the domestic market in 2022, the country total public debt currently stands N41.026 trillion.

According to the DMO, proceeds of the Eurobond would be used to finance critical capital projects in the 2022 Budget to bridge infrastructure deficit in and strengthen Nigeria’s economic recovery.

The DMO in a statement announced that the Eurobond offer was launched at an initial price  of 8.75 per cent per annum,  adding that on the back of strong investor demand, Nigeria was able to revise the price guidance to 8.5 per cent per annum.

According to the DMO, the Order Book continued to grow, reaching a peak of $4 billion.
The Order Book included many quality investors in the United States, Europe and Asia.

“With this strong investor interest, the price was tightened to 8.375 per cent per annum, the Order Book still remained high at 3.676 billion and retained the quality investors.

“Nigerian investors also participated in the Offer with a total subscription of $60 million
“The proceeds of the Eurobond will be used to finance critical capital projects in the Budget to bridge the deficit in infrastructure and strengthen Nigeria’s economic recovery.

“Equally important, it would contribute directly and in full to the level of Nigeria’s external reserves,” the DMO said.

Meanwhile, the DMO which revealed the country’s total debt position, disclosed that the federal government has so far borrowed about N950 billion from domestic sources to finance the N6.39 trillion deficit in the 2022 Budget.

The sum of N2.57 trillion was to be borrowed from domestic sources and another N2.57 trillion from foreign sources, while government hopes to draw down N1.16 trillion from multilateral/bi-lateral loans and harvest N90.7 billion from privatisation proceeds to fund the deficit.