THE Federal Government has announced plans to issue $500 million in domestic foreign currency-de-nominated bonds in three to four weeks’ time.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy said this during a quarterly press briefing in Abuja, themed ‘Economic Recovery and Growth: Progress and Prospects 2024’.
He said: “We have an open exchange rate system. It is not illegal and so we have the issuance of a dollar-denominated security, not depending on the financial architecture of the Western world, not depending on the kind of architecture that you use to raise Eurobonds.
“We’re using the Nigerian financial system, the Securities and Exchange Commission (SEC), the banking system, the investment bankers to issue $500 million in the first instance that will be available and will attract foreign currency held by Nigerians abroad and anybody else who buys into the macroeconomic reform efforts of President Bola Tinubu“That issue is a challenge to the best and the brightest in the financial markets. It is due to open in the next three to four weeks maximum.”
Addressing the potential for raising Eurobonds, Edun clarified that the government has no current plans to pursue this route, contingent on the success of the domestic foreign currency-denominated bonds.
The finance minister said: “Right now, depending on the success of that issue, there is no talk of looking to go to the international markets to raise the euro bond.
“It is one of the options that we have. Our ratings and our performance merit it. The market is open to us but we prefer in the first instance to challenge Nigerians to come home with their money and be part of the Nigerian reform success story that we believe that is where the economy is headed.
“Although these are very, very early stages, we are in the right direction. We have turned the corner.”
It was earlier reported that the federal government plans to begin the issuance of
domestic bonds denominated in foreign currency starting from the second quarter of this year.
The Minister of Finance, Wale Edun, announced the government’s plan to market foreign exchange bonds to Nigerians both at home and in the diaspora.
Edun, however, explained that the delay in issuing the bonds was due to the government’s desire to establish confidence in its fiscal strategy and earn the trust of citizens who are skeptical of
government policies.
Meanwhile, the FGN Eurobond market kicked off last week on a bearish note as selling pressures persisted. The bearish trend persisted after the release of the U.S S&P Global Services Purchasing Manager’s Index (PMI) data which printed at 56.0 vs 54.9 estimated and 55.3 prior.
In contrast, the U.S. S&P Global Manufacturing PMI came in at 49.5 (estimated 51.6; previous 51.6). The market also saw the release of the GDP figures which printed at 2.80 percent compared to 2.0 percent expected while initial Jobless Claims came in at 235,000 versus the 237,000 anticipated.
Week-on-week, the average benchmark yields gained 8 basis points (bps), settling at 9.95 percent.
READ ALSO: South-West hunters threaten strike over alleged victimisation
