The Nigerian government has engaged leading global investment banks, including Citibank NA, JPMorgan Chase & Co., and Goldman Sachs Group Inc., to guide its forthcoming Eurobond issuance.
The development, according to a report by Bloomberg and informed by sources close to the transaction, underscores Africa’s most prolific oil-producing nation’s intent to re-engage with global financial markets to support its budgetary needs for the fiscal year.
The government had previously appointed Standard Chartered Bank and the Lagos-based financial advisory firm Chapel Hill Denham to consult on this venture.
Since assuming office in May 2023, President Bola Tinubu has championed policies to revitalise foreign investment inflows into Nigeria. These initiatives range from implementing two devaluations of the naira to foster a more flexible exchange rate regime, narrowing the disparity between the Central Bank’s policy rate and the yields on government securities, to the controversial elimination of fuel subsidies.
This move marks the country’s return to the international bond market after a two-year pause. In March 2022, the country raised $1.25 billion through Eurobond issuances.
While the exact magnitude of the Eurobond offering, anticipated to be unveiled before the mid-year mark, remains undecided, insiders, who preferred to remain anonymous due to the sensitive nature of the information, speculate that the nation might aim to accumulate up to $1 billion in international loans throughout 2024.
This external funding is crucial for Nigeria as it seeks to finance a substantial budget deficit outlined in President Bola Tinubu’s N28.8 trillion ($18 billion) spending blueprint for 2024, targeting a fiscal shortfall of N9.8 trillion, or 3.8% of its GDP.
The deficit is expected to be bridged through local and international borrowings and assistance from global financial institutions.
