Nigeria has no plans to issue Eurobonds in 2023 – Zainab Ahmed

Zainab Ahmed, Nigeria’s minister of finance, has said that the country won’t be issuing any Eurobonds until 2023. When questioned on Wednesday about Nigeria’s plans to borrow money through Eurobonds, she revealed this.

According to Zainab Ahmed, Nigeria will prioritize concessionary loans from organizations like the World Bank, Asian Development Bank, or Islamic Bank in exchange for Eurobonds.

“Our external borrowing sources are very much open at multilateral institutions … and our focus is on those loans unless we have no option because loan processes are very long.”

“The prices of bonds are too high now in most African countries. No one is going near there now. We hope 2023 will bring about some improvement.”

The 2023 budget for Nigeria contains an N1.76 trillion external borrowing requirement (equivalent in dollars).

Data from the Debt Management Office show that as of July 12, 2022, the yield on Nigeria’s $1.5 billion Eurobond with a February 2031 maturity increased to 14.29%.

The price of the 5-year Eurobond, which has a maturity date of November 2027 and a coupon of 6.5%, concluded the month of October at $71.39 with a yield of 14.45%. The price of the 10.87% coupon, a 10-year Eurobond with a maturity date of February 2032, closed at $64.7 in October, yielding 14.45%.

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However, data tracked by RNN shows that the 10-year Eurobond rallied to $77.26 per $100 par price in November while the 5-year Eurobond climbed to $80 per $100 par price.

The minister still thinks the yields are high and act as a deterrent to additional borrowings. Nigeria now has borrowings on its Eurobonds totaling roughly $15 billion over various tenures and coupons. There have been around 8 issuances, with the most recent being a $1.25 billion Eurobond that was issued earlier this year.

According to RNN analysis, the overall public debt of Nigeria is $151 billion, which includes the central bank’s approximately N20 trillion Was and Means loan. Nigeria plans to run a total budget deficit of N10.78 trillion, or 4.78% of GDP, in 2023.

Borrowings of N7.04 trillion from local sources and N1.76 trillion from foreign sources are included in covering the deficit. If the next administration in 2023 chooses to proceed in a different route, these plans could be altered.