By Samuel Bankole
In a groundbreaking financial manoeuvre, Nigeria has secured over $900 million from its inaugural Domestic Federal Government of Nigeria (FGN) US Dollar Bond issuance, marking a significant step in advancing financial inclusion and strengthening the economy.
The Debt Management Office (DMO) hailed the issuance as a landmark achievement in the country’s economic development.
The bond, which carries a 9.75% coupon over five years, was met with overwhelming demand, achieving an impressive 180% subscription rate.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, emphasized that the strong interest reflects investor confidence in Nigeria’s economic stability and growth prospects.
The issuance is the first under the Domestic FGN US Dollar Bond Programme, established under Presidential Executive Order No. 16 of 2023.
“This successful bond issuance demonstrates that both domestic and international investors continue to have faith in Nigeria’s economy,” Edun said in a statement.
He noted that the funds raised would be allocated to key sectors of the economy, as directed by President Bola Ahmed Tinubu, with a focus on driving growth and economic diversification amid ongoing challenges.
The landmark transaction attracted a broad range of investors, including Nigerians residing both domestically and abroad, as well as qualified institutional investors. The bond will be listed on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited, further positioning Nigeria as a major player in deepening its capital markets and promoting financial inclusion.
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Strengthening Market Depth
DMO Director General, Patience Oniha, praised the diverse investor base and the success of the issuance, which exceeded expectations by raising over $900 million, well above the initial $500 million offer.
“This historic transaction highlights the growing depth and sophistication of Nigeria’s domestic fixed-income market,” Oniha said.
She also acknowledged the crucial role played by financial partners, including Africa Finance Corporation as Global Coordinator and United Capital Plc as Lead Issuing House. Other key players included Meristem Capital Limited, Stanbic IBTC Capital Limited, Vetiva Advisory Services Limited, and legal advisers Olaniwun Ajayi LP and G. Elias.
Oniha expressed gratitude for the collaborative efforts of all parties involved, adding, “The success of this bond issuance underscores the confidence in Nigeria’s economic trajectory and our commitment to driving sustainable growth through innovative financial solutions.”
Outlook on Economic Growth
The proceeds from the bond will be channelled into critical sectors of the economy, providing a much-needed boost as the country seeks to overcome economic headwinds. The government’s ability to raise significant capital from its domestic market while attracting a diverse pool of investors demonstrates a growing sophistication in Nigeria’s financial system.
The move signals the Federal Government’s ongoing efforts to diversify its funding sources while maintaining investor confidence, despite external challenges such as inflationary pressures and global economic uncertainty.
Analysts believe the success of this bond issuance could pave the way for future domestic dollar-denominated offerings, helping to enhance liquidity and deepen the capital markets further.
With this issuance, Nigeria has taken a significant step toward achieving its financial inclusion goals, ensuring broader participation in its economic development agenda while addressing the country’s critical infrastructure and funding needs.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
