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Nigeria Raises $1.25bn Through Eurobonds as Public Debt Hits N41.026tn

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By Derrick Bangura

Nigeria has issued a seven-year Eurobond worth $1.250 billion (N520 billion) in the International Capital Market (ICM), making it the first African country to do so in 2022.

As of December 31, 2021, Nigeria’s total public debt stock, which includes the federal government, the Federal Capital Territory (FCT), states, and local governments, stood at N39.556 trillion, according to the Debt Management Office (DMO).

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Furthermore, the DMO revealed that the federal government has borrowed about N950 billion from domestic sources so far to cover the N6.39 trillion deficit in the 2022 budget.
When the country’s new Eurobond is added to its debt position as of December 31, 2021, as well as the N950 billion it borrowed from the domestic market in 2022, the country’s total public debt stands at 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.

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“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

Nigeria’s ability to access the ICM at this time underscores her established presence in the ICM and engagement with investors on a continuous basis.
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.
The DMO Director General, Ms. Patience Oniha who unveiled the latest debt figures during an interactive session with journalists in Abuja on Thursday, noted that the comparable figure for December 2020 was N32.915 trillion or $86.392 billion.

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The N39.556 trillion debt recorded as of December 31, 2021, was N1.566 trillion higher than the N38 trillion recorded as of September 30, 2021, even as Debt-to-GDP stood at 22.47 per cent as of December 31, 2021.

Oniha explained that the public debt stock for December 31, 2021, included new borrowings by the Federal Government of Nigeria (FGN) and sub-nationals, adding that for the FGN, the 2021 Appropriation and Supplementary Acts included total borrowing from domestic and external sources of N5.489 trillion to part-finance the deficit.
She added: “Borrowings for this purpose and disbursements by multilateral and bilateral creditors account fora significant portion of the increase in the debt stock. Increases were also recorded in the debt stock of the states and the FCT.

“The new borrowings were raised from diverse sources, primarily through the issuance of the Eurobonds, Sovereign Sukuk and FGN Bonds. These capital raising were utilised to finance capital projects and support economic recovery.

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“With total public debt stock to Gross Domestic Product (GDP) as at December 31, 2021, of 22.47 per cent, the Debt-to-GDP ratio still remains within Nigeria’s self-imposed limit of 40 per cent.
“This ratio is prudent when compared with the 55 per cent limit advised by the World Bank and the International Monetary Fund ((IMF)for countries in Nigeria’s peer group, as well as the ECOWAS Convergence Ratio of 70 per cent.”

According to her, the federal government was mindful of the relatively high debt-to-revenue ratio and had initiated various measures to increase revenues through the Strategic Revenue Growth Initiative and the introduction of the Finance Acts since 2019.
Explaining why debt was growing, the DMO chief executive explained that debt accumulation was a global phenomenon, particularly necessitated by the impact of the COVID-19 pandemic.

She noted that as long as the country has been running deficit budgets for decades now, borrowing was inevitable, pointing out that as the country borrows each year, the existing debt stock expands.

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Oniha stressed that high debt service rate was a function of the quantum of borrowing accumulated to build infrastructure.

On why the country was not excited by the rising prices of oil in the international market, Oniha said on one hand, Nigeria was not meeting its Organisation of Petroleum Exporting Countries (OPEC) while it also imports refined products which are denominated in dollars.

The DMO DG also reacted to reports that China was no longer willing to lend to Nigeria, adding that her office has continued collaboration with China on behalf the country.

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She stressed that China’s loans to Nigeria account for just about three per cent or less than $4 billion of the nation’s total external loans, stressing that Nigeria has diversified its funding sources to avert any adverse impact from a particular lender.

Oniha disclosed that efforts to structure the federal government’s overdraft from the Central Bank of Nigeria (CBN) under the Ways and Means window were continuing.

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Tinubu arrives Katsina to receive Buhari’s body for burial

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President Bola Tinubu, on Tuesday arrived in Katsina to receive the remains of the former President Muhammadu Buhari, who passed away in London on Sunday at the age of 82.

The News Agency of Nigeria (NAN) recalls that Vice-President Kashim Shettima departed London in the early hours of Tuesday with the remains of Buhari back to Nigeria.
On arrival at the Umaru Musa Yar’adua Airport Katsina, Tinubu was received by Gov. Dikko Radda,  former Vice-President Yemi Osinbajo, governors, Chairman of Dangote Group, Alhaji Aliko Dangote, Deputy Senate President, Jibrin Barau, and Speaker of the House of Representatives,  Tajudeen Abbas.
Others are Ministers, former governors, former and serving Senators, Alhaji Dahiru Managl,  former Minister of Information and Culture, Lai Mohammed, members of the All Progressives Congress (APC) National Working Committee (NEC), amongst others.
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“He Never Turned His Back on the Needy” — Tributes Pour In Ahead of Buhari’s Burial

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Just hours before the burial of former President Muhammadu Buhari, heartfelt tributes have continued to pour in from beneficiaries of his many charitable deeds, with many describing him as a man who never turned his back on the needy.

Speaking to the News Agency of Nigeria (NAN) on Tuesday, Aminu Daura, a respected community elder, recalled how Buhari consistently provided foodstuffs during Ramadan for families, friends, widows, and orphans in his hometown.

“He never made noise about it, but many homes had food on their tables during fasting period because of him,” Daura said.

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Abdullahi Sani, a physically-challenged man who received a tricycle from the Buhari Foundation in 2021, was overcome with emotion while speaking to NAN.

“I can move around and feed my family today because of Baba Buhari. I pray to Allah to reward him for giving hope to people like me,” he said, in tears.

Hajiya Fatima Yahaya, another resident, remembered Buhari’s acts of kindness during festive seasons.

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“Even after he left office, his aides ensured that the usual support still reached us every year. He always remember his people,” she said, referring to his distribution of Sallah rams and food items to indigent families during Eid celebrations.

Other residents of Daura also shared memories of how the late former president quietly paid school fees and medical bills for struggling families, actions rarely publicized.

“Some of us benefited from his silent interventions. He was a true father and a great figure in the society,” said Ali Saidu.

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On Monday night, Imams across various mosques in Daura held special Qur’anic recitations, praying for the forgiveness of Buhari’s sins and his eternal peace.

The Chief Imam of Daura Central Mosque, Sheikh Musa Kofar Barau, described Buhari as a humble leader whose legacy of service and compassion would remain alive in the hearts of the people.

Buhari is scheduled to be buried later on Tuesday in his hometown of Daura, Katsina State, in line with Islamic rites. The community is bracing to welcome thousands of mourners from across Nigeria and beyond.

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King Mohammed VI Mourns Buhari, Praises Legacy of Nigeria’s Former Leader

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His Majesty King Mohammed VI of Morocco has extended heartfelt condolences to President Bola Tinubu, the family of the late former President Muhammadu Buhari, and the entire Nigerian people following Buhari’s death.

In a message of sympathy, the Moroccan monarch described the passing of the former Nigerian leader as a “sad occurrence,” expressing deep sorrow over the loss.

King Mohammed VI hailed Buhari as “an illustrious leader who worked untiringly to serve his country’s best interests and lead his people toward further progress and prosperity.”

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He added: “Our thoughts and prayers are with you and the bereaved. I share your grief and want you to know how much I appreciated the working sessions I had with the deceased.”

Reflecting on their bilateral engagements, the king noted that his collaboration with Buhari led to the launch of promising development projects, “ushering a new era grounded in friendship and close cooperation between our two sister nations.”

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