The Federal Government of Nigeria is set to introduce a $500 million domestic dollar bond on Monday, August 19th, a major move aimed at bolstering the nation’s economic framework.
During a recent roadshow in Lagos, Finance Minister and Coordinating Minister of the Economy Wale Edun emphasized that this bond is a pivotal element of the government’s strategy to mobilize resources for national development and enhance economic stability. He underscored the bond’s key benefits, including its tax-exempt status, safety, diversification opportunities, and predictable cash flow. The initiative is also designed to support the development of the domestic capital market and improve asset liquidity.
Edun noted that the bond targets a wide range of investors, including Nigerians both within the country and in the diaspora, as well as non-Nigerians residing in Nigeria. “This bond presents a chance for those abroad who are confident in Nigeria’s economic potential to contribute to its growth and competitiveness. It also provides an opportunity for Nigerians with savings abroad to invest in a secure and profitable asset,” he explained.
The bond, which will be issued at par and fully paid, has a five-year term with semi-annual payments. It is set to fund critical sectors essential for economic development and revenue generation. Gabdebo Adenrele, Managing Director of Investment Banking at United Capital, provided details about the bond’s structure, stating that it will be listed on both the Nigerian Exchange Group (NGX) and the FMDQ Securities Exchange, utilizing existing market infrastructure.
The bond will involve principal repayment in US dollars at the end of the term, with all transactions, including interest payments and insurance, conducted in dollars. Backed by Federal Government securities, this bond is open to both Nigerian and international investors, marking a significant step in Nigeria’s financial strategy.
“This is the first issuance in dollars, featuring a semi-annual coupon structure. The bond will be invested in key sectors approved by the president, with recommendations from the Finance Minister and ratification by the National Assembly,” Adenrele added.
Nigeria is gearing up to launch a $500 million domestic dollar bond on Monday, August 19th, marking a significant financial strategy aimed at strengthening the economy.
Finance Minister and Coordinating Minister of the Economy, Wale Edun, detailed the bond’s features during a roadshow in Lagos, emphasizing its role in resource mobilization and economic stability. The bond, which is tax-exempt, is designed to offer safety, diversification, and predictable cash flow, while also supporting the development of the domestic capital market and improving asset liquidity.
With a minimum investment set at $10,000 and additional increments of $1,000, the bond is accessible to a broader range of investors. It is also eligible for pension fund investments, maintaining the same tax-exempt benefits as other Federal Government securities.
Edun highlighted that the bond targets Nigerians domestically and abroad, as well as non-Nigerians residing in Nigeria. It presents a valuable opportunity for diaspora investors and Nigerians with overseas savings to participate in Nigeria’s growth and economic competitiveness.
The five-year bond will be issued at par, with semi-annual payments and principal repayment in US dollars. It will be listed on both the Nigerian Exchange Group (NGX) and FMDQ Securities Exchange, leveraging existing market infrastructure. This bond aims to boost external reserves and stabilize the exchange rate, contributing to economic stability, reducing inflation, and fostering job creation and poverty reduction.
In light of global financial market challenges and Africa’s push for self-reliance, the bond is seen as a strategic initiative for Nigeria to harness domestic savings and enhance its global competitiveness. It aligns with the Federal Government’s broader economic policies focused on poverty reduction, job creation, and investment stimulation.
