Nigeria is planning to raise debt abroad regularly as Africa’s largest oil producer seeks to develop a benchmark for borrowers, Finance Minister Ngozi Okonjo-Iweala said.
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| Okonjo-Iweala, Nigeria's finmin |
The government returned to international debt markets for the first time in two years in July, issuing $1 billion in five-year and 10-year Eurobonds. The country now plans to raise $100 million by selling so-called diaspora bonds targeted at citizens living overseas.
“If it succeeds, we’ll do more,” Okonjo-Iweala told Bloomberg News in Washington yesterday, adding that the sale will take place in the first quarter of next year. “We intend to enter the market on a regular basis because we’re trying to build a yield curve.”
Nigerians abroad would have sent $21 billion home by the end of 2013, according to World Bank figures, and the government wants “to tap some of that,” Okonjo-Iweala said. The nation is stepping up debt sales to finance infrastructure as it faces inadequate budget allocations for capital spending.
The yield on Nigeria’s $500 million in Eurobonds due July 2023 dropped 18 basis points this month to 5.94 percent yesterday, the lowest level since July 23, according to data compiled by Bloomberg.
The Nigerian economy may expand 6.75 percent next year, compared with an estimate of 6.5 percent in 2013, Okonjo-Iweala said. The budget deficit will stay little changed at 1.9 percent of gross domestic product, she added.
“The outlook is reasonably good,” she said. “We are keeping a tight fiscal balance. We believe in fiscal consolidation with growth. Whatever fiscal space we create we’re going to use that to tackle the bottlenecks, and for us, they are power and infrastructure.”
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