The $500 million domestic FGN US dollar bond will increase external reserves and aid in stabilising the foreign exchange position in the nation, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy.
Edun made this statement on Thursday in Lagos at the hybrid roadshow ahead of the offer’s tentative opening on Monday.
“We are here today to discuss dollar funding, which is critical for the exchange rate and essential for stabilising investment and the economy. The Central Bank has adopted the ‘willing buyer, willing seller’ model, which has proven efficient and has contributed to the influx of additional dollars.
“Specifically, the flow of dollars into the economy has improved through portfolio investors, foreign direct investors, and multilateral organisations that have supported the President’s macroeconomic policies. Today, we are playing a significant role in this process with the domestic issuance of US dollar bonds, aimed at increasing the flow of dollars into the economy.
“We are already seeing success with the combination of monetary and
fiscal policies, which is attracting foreign portfolio investments (FPIs).
Additionally, foreign direct investments are starting to increase, particularly in the oil and gas sector. More foreign exchange leads to higher reserves and a stronger exchange rate, which can reduce inflation and, consequently, interest rates. This creates opportunities for borrowing, investing, increasing productivity, creating jobs, and reducing poverty,” he said.
He mentioned that figures from the Central Bank of Nigeria showed that as of August 12, Nigeria’s foreign reserves were $36.62 billion.
Speaking about the offer in detail, Dr. Gbadebo Adenrele, Managing Director of Investment Banking at United Capital, the primary issuing house, said that the $500 million domestic bond is intended for Nigerian citizens as well as foreign nationals living in the nation and the Nigerias in diaspora.
He said that the bond’s five-year tenor and $10,000 minimum investment would allow for greater participation.
Investor value will be maintained since repayment will be made in US dollars. The Nigerian Exchange Limited and FMDQ will list the bond.
