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Nairaland Forum / Nairaland / General / Investment / GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond (2371 Views)
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GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by debosky(m): 5:13pm On Jan 21, 2011 |
http://234next.com/csp/cms/sites/Next/News/National/Economy/5664932-146/story.csp The Financial Time of London reports that major investors are snubbing Nigeria’s Euro bond which debuts today. According to the report, investors are concerned at the way funds in the Excess Crude Account have been utilised. ‘’ Mounting concern about a huge outflow of money from Nigeria’s “rainy day” oil fund has prompted some big investors to shun the country’s debut international bond issue on Friday’’, says the paper. Although Nigerian officials have said there is a lot of interest in the $500m bond issue, the Financial Times says ‘’ several major funds have told the Financial Times they are not interested in the deal because of Nigeria’s deteriorating fiscal situation and w[b]orries about how President Goodluck Jonathan’s government has run the excess crude account, designed to store up windfall oil revenues.’’[/b] The excess crude account was set up during the tenure of the former President of Nigeria, Olusegun Obasanjo. According to the Financial Times report, ‘’ at that time there was $20bn in the fund. But as recently as last September there was less than $400m, according to public disclosures, which showed billions flowing out of the account last year.’’ According to Financial Times calculations, ‘’ more than $30bn of revenues – calculated on the difference between the budgeted and market price of oil – has flowed out of the account, according to donor and government officials. The funds went partly in regular payments to state governors over which there was little subsequent oversight, and partly in federal spending on infrastructure. ‘’ The Financial times quotes Antoon de Kler of South African based investec as saying“ the fact they have run down the excess crude account is very worrying,“ “it is unclear where the money is going”. “Why does a country that relies for 90 per cent of its income on oil, which has seen a big rise in price, needs to run down its foreign exchange reserves? For these reasons we are not buying the bond.” And according to the Financial Times, he wasn’t the only one that expressed these concerns. ‘’ Other big international investment funds, which invest in Africa, also told the FT they would not participate in the sale. Some Nigerian politicians and officials have questioned why foreign reserves have not risen, and the excess crude account did not grow during the past year of rising oil prices.’’ $16 billion is what Nigeria is believed to have earned in ‘’ windfall revenues in 2010,’’ These figures according to the Financial Times were based on information from technocrats working within Nigeria’s administration and the calculations are ‘‘ based on production of 750m barrels of oil with average oil prices $21 higher than the $60 budgeted.’’ Nigeria’s finance Minister , Olusegun Aganga, told the FT that in addition to some of this money going to the country’s Joint venture partners, the country ‘‘ spent heavily on oil production last year and on clearing arrears to oil companies’’ adding that ‘‘ the government had also partly financed the budget deficit out of the excess crude account to reduce domestic borrowing.’’ NEXT’s efforts to get through to Mr. Aganga for his reaction to the Financial Times story have so far been unsuccessful although, we will keep trying. |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by 10cirenoh: 5:19pm On Jan 21, 2011 |
Ewwoooo see money, oya GEJ start to dey spend, spend like pikin wey never see fried chicken for eyes before. GEJ, DON'T EAT AWAY OUR FUTURE OOOOO |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by latch(m): 10:46am On Jan 22, 2011 |
20 billion to 400 million , on what? |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by omanzo02: 11:40am On Jan 22, 2011 |
My friend, please get your fact right, the bonds were enthusiatically well received and oversubscribed. http://www.reuters.com/article/idUSLDE70K12220110121?loomia_ow=t0:s0:a49:g43:r1:c0.391304:b41172416:z0 |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by maxell(f): 4:45pm On Jan 22, 2011 |
omanzo02: Earlier reports were that the issue was under-subscribed. Later on, they report that the bonds were actually over-subscribed by 2.5 times ($1.5 billion). So you are both right; the news media outlet are to blame |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by jamace(m): 5:59pm On Jan 22, 2011 |
Earlier reports were that the issue was under-subscribed. Later on, they report that the bonds Wrong on the highlighted. This OP has grudges against GEJ and his govt, and that informed the title of his thread "Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond". He is a GEJ's failure seeker. I'm sure the OP will be disappointed by this: https://www.nairaland.com/nigeria/topic-590664.0.html Bad belle people! |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by Tsiya(m): 6:37pm On Jan 22, 2011 |
Why do we even need to issue bonds? Aganga came with his Goldman Sach ideology that every government must issue bond to international investors. But issuing bond is literary going into debt. So instead of going to National Assembly to get permission for borrowing, now they want to start selling bonds to international financiers, who will continue milking us and our great great grand children. What do we need the money for? They should tell us what they are going to do with the money they raised from capital market? Europe is crumbling. Portugal, Ireland, Italy, Greece, Spains are all in huge economic conundrum as a result of selling bonds to investors. I wish nobody buy the bonds. But heck, who is a fool? After the last time, the Paris club raked nearly $18Bn for giving us $3Bn and therefore anybody will buy Nigerians bonds. We are oil producing country and we always pay our debts. |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by 4Play(m): 10:34pm On Jan 22, 2011 |
Why do we even need to issue bonds? It's supposed to serve as a benchmark. I don't think we need the money. The idea is that it serves as point of reference in assessing Nigeria's credit worthiness. For me, it's been disappointing. |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by snowdrops(m): 10:47pm On Jan 22, 2011 |
Elections are around the corner. Politicians need excuse to steal money. |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by Beaf: 10:48pm On Jan 22, 2011 |
The bond is extremely successful: [size=14pt]UPDATE 5-Nigeria's debut Eurobond heavily oversubscribed[/size] http://af.reuters.com/article/nigeriaNews/idAFLDE70K12220110121?sp=true |
Re: GEJ's Reckless Spending Causes Investors To Shun Nigeria’s $500 Million Eurobond by rasputinn(m): 11:26pm On Jan 22, 2011 |
@ Debosky Which Eurobond are you referring to? hope not the same one that was HEAVILY over-subscribed? Please stop referring to next newspapers,they seem to be on a mission to outdo sahara reporters in the area of sensational journalism,so always take their "stories" with a |
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