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

Nigeria’s Minister of Finance, Zainab Ahmed, has confirmed that the government has no plans to issue Eurobonds in 2023.

She disclosed this on Wednesday while responding to questions about Nigeria’s Eurobond borrowing plans.

In exchange for Eurobonds, Zainab Ahmed insists, Nigeria will focus on concessionary loans from the likes of the World Bank, ADB, or Islamic Bank.

What Zainab Ahmed is saying

  •  “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.”

Nigeria’s 2023 budget includes an external borrowing need of about N1.76 trillion (equivalent in dollars).

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Higher Yields: Nigeria’s $1.5 billion Eurobond yield with a maturity of February 2031 rose to 14.29% as of July 12, 2022, according to data from the Debt Management Office.

  • The 5-year Eurobond dated November 2027 with a coupon of 6.5% closed the month of October priced at $71.39 with a yield of 14.45%. The 10-year Eurobond dated February 2032 with a coupon of 7.87% closed the month of October priced at $64.7 with a yield of 14.45%.
  • However, The 5-year Eurobond mentioned above rallied to $80 per $100 par price while the 10-year Eurobond rallied to $77.26 per $100 par price in November according to data tracked by Nairametrics.
  • Despite this, the minister believes the yields are still high and a disincentive for further borrowings.

Update on Eurobonds: Nigeria currently has a total Eurobond borrowing of about $15 billion spanning different tenures and coupons. Issuances are about 8 in number with the latest issued a $1.25 billion Eurobond issued earlier this year.

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  • Nigeria has a total public debt of $151 billion as per Nairametrics research and it includes the Was and Means loan from the central bank of about N20 trillion.
  • Nigeria is budgeting a total budget deficit of N10.78 trillion for 2023 representing 4.78% of GDP.
  • Included in the funding of the deficit are borrowings from domestic sources of N7.04 trillion and from Foreign sources of N1.76 trillion.

2023 Election: These plans may be changed if the new government decides to tow a different direction in 2023.

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