₦airaland Forum

The Federal Government has announced plans to raise approximately $1.7 billion through the issuance of Eurobonds to help finance the revenue shortfalls of the 2024 budget.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this on Thursday at the State House in Abuja.

Edun also revealed that the government intends to issue Islamic Sukuk bonds to raise an additional $500 million as part of its international money market instruments to generate capital.

The 2024 budget of N28.7 trillion (approximately $17 billion) includes a projected deficit of N9.1 trillion ($5.2 billion), which would be financed through borrowing.

While Edun did not announce the issuance dates for the foreign bonds, he stated that authorities are working to submit the borrowing plan to the National Assembly this year, with the aim of securing approval “as soon as possible.”

He noted that the new borrowing “is part of the Nigerian 2024 Appropriation Act as amended.”

Earlier this year, Nigeria raised about $900 million in its first domestic sale of dollar-denominated bonds.

Projected Increase in External Debt

The proposed Eurobond aims to raise capital for the country and reintroduce Nigeria to the international debt capital markets.

However, this also implies a potential increase in Nigeria’s external debt, currently estimated at $42.9 billion, which constitutes approximately 39% of the country’s total debt stock.

To date, Nigeria has largely managed its external borrowing and has focused primarily on domestic debt, relying on various Central Bank money market instruments such as Federal Government Bonds, Treasury Bills (T-Bills), and Open Market Operations (OMO).

In naira terms, the country’s domestic debt has surged to approximately N66.9 trillion as of the second quarter of 2024, representing about 60% of the total debt stock.

Moreover, the downside of foreign currency-denominated debt lies in the higher interest costs for debt servicing.

This challenge is compounded by the naira’s devaluation, which will further escalate the cost of servicing external debt.

What you should know

In September, Nigeria issued its first $500 million domestic foreign currency-denominated bonds, which were oversubscribed to $900 million.

The Minister of Finance Wale Edun then said that the country would not issue a Eurobond, citing concerns that such a move could expose Nigeria’s volatile dollar securities to higher debt costs.

However, with significant revenue shortfalls largely driven by low crude oil output, the need for a Eurobond is becoming increasingly critical to raise capital and address budget deficits.

Meanwhile, the International Monetary Fund (IMF) has expressed concerns about Nigeria’s strategy to issue dollar-denominated bonds.

The Fund warned that such measures could intensify pressure on the naira and increase the costs associated with naira securities.

Additionally, the IMF highlighted that the federal government’s plan to introduce domestic foreign exchange securities—aimed at improving dollar liquidity in the official market—could lead to market fragmentation.

DrDoc:
Na wa o. APC and its massive poverty manufacturing

DrDoc:
Na wa o. APC and its massive poverty manufacturing

Yankee101:
What happened to all the new taxes ?

Alliswell248:
I'm sure you don't understand the content.

Headless mob indeed

nairalanda1:
LOL

Anytime I hear 'new taxes' I want to laugh.

70% Of Nigerians eligible for taxes don't pay taxes. A lot of them think they pay taxes, but it goes into a black hole of corruption. Our tax to gdp is lower than even Niger Republic.

And it has been going on for decades. Our leaders take loans in part because they do not want to santise the tax collection system...because it means taxing very poor Nigerians. Not going to win votes.

nairalanda1:
LOL

Anytime I hear 'new taxes' I want to laugh.

70% Of Nigerians eligible for taxes don't pay taxes. A lot of them think they pay taxes, but it goes into a black hole of corruption. Our tax to gdp is lower than even Niger Republic.

And it has been going on for decades. Our leaders take loans in part because they do not want to santise the tax collection system...because it means taxing very poor Nigerians. Not going to win votes.

Alliswell248:
I'm sure you don't understand the content.

Headless mob indeed




Keep defending your slave masters. Hope say you don chop?

Sheuns:
Nigerians pay taxes both directly and indirectly. What do the politicians use the money realized from such taxes for?

NothingDoMe:
They don't need the actual voters to win so they should go ahead and sanitize.

nairalanda1:
LOL...they do. Infact, the last election , Tinubu only won because a large chunk of PDP voters voted for Peter Obi. Had Obi not run, Tinubu would have been permanently retired from politics (and yes, it is a good thing.).

But if Nigerians were really paying tax as they do in sane countries, we would get good governance by fire, by force. Which joker, after paying half his salary every month in real tax , is going to sit down and watch some fvker loot the money? And which joker is going to loot money under those circumstances. He or she would be dragged out of office and burned to death.

But because most of our income comes from oyel, and loans, we don't take it serious.

LandMann:
Knowing Nigeria with its penchant for electing useless corrupt leaders, I'll warn every sensible hardworking and honest person who has savings in USD to stay off this bond.

I foresee a future were the government will loot a large proportion of the bond proceeds and thus face difficulty in repaying the loan upon maturity, since the loan raised wasn't used for any productive purpose.

Since it's domestic issued USD bonds, the government will forcefully give you the option to receive Naira in exchange for your USD, since USD is "not available"; Naira that they can easily print like Tinubu advised Buhari the dumbass to print 21 trillion naira which is part of the cause of this inflation now.

So, Naira will depreciate more and things will become more expensive. The government will start fixing exchange rate low at the official market but the parallel market rate will be higher cos that's closer to the truth. You don't believe me? Ask yourself why a honest government will peg 2025 budget exchange rate at N1400 while current exchange rate is over N1700.

The government is planning an expansionary deficit budget to be heavily financed through borrowings that will be looted in a highly inflationary economy. Inflation will continue to rise and naira will continue to lose value. If you purchase this bond you have an 91% chance of loosing your money. Save this post.

In summary, Tinubu's government wants to use deception to forcefully convert your USD to Naira.
They're going to loot most of the USD they raise through this bond and stash it abroad.

Be wise.

If you have USD and you're looking for how to exchange it, look for a reputable crypto exchange, buy usdt and stake it and rest.

Don't say you were not warned.

ogaemma:
This Wale Edun seems to have set a new record, as the worst Minister of finance in the history of Nigeria.
Nigeria now have one of the worst economy in Africa.
Guinness book of world records must announce him.

LandMann:
Knowing Nigeria with its penchant for electing useless corrupt leaders, I'll warn every sensible hardworking and honest person who has savings in USD to stay off this bond.

I foresee a future were the government will loot a large proportion of the bond proceeds and thus face difficulty in repaying the loan upon maturity, since the loan raised wasn't used for any productive purpose.

Since it's domestic issued USD bonds, the government will forcefully give you the option to receive Naira in exchange for your USD, since USD is "not available"; Naira that they can easily print like Tinubu advised Buhari the dumbass to print 21 trillion naira which is part of the cause of this inflation now.

So, Naira will depreciate more and things will become more expensive. The government will start fixing exchange rate low at the official market but the parallel market rate will be higher cos that's closer to the truth. You don't believe me? Ask yourself why a honest government will peg 2025 budget exchange rate at N1400 while current exchange rate is over N1700.

The government is planning an expansionary deficit budget to be heavily financed through borrowings that will be looted in a highly inflationary economy. Inflation will continue to rise and naira will continue to lose value. If you purchase this bond you have an 91% chance of loosing your money. Save this post.

In summary, Tinubu's government wants to use deception to forcefully convert your USD to Naira.
They're going to loot most of the USD they raise through this bond and stash it abroad.

Be wise.

If you have USD and you're looking for how to exchange it, look for a reputable crypto exchange, buy usdt and stake it and rest.

Don't say you were not warned.