Nigeria’s presidency has approved plans for external borrowing from the World Bank, China and Japan.
Nigeria
will take on debt from institutions including the World Bank, African
Development Bank, Japan International Cooperation Agency and
Export-Import Bank of China, the presidency commented on Twitter.
This
will include “low-cost, long-term” loans with interest rates of 1.25
percent and maturities of 20 years, according to the tweets.
Details of a
Eurobond will be announced “in due course.” The government is now
waiting for lawmakers to approve the plans, the presidency said.
President
Muhammadu Buhari announced a record 6.1 trillion naira ($19.4 billion)
spending plan this year to try and stimulate the economy, which
contracted in the first two quarters as oil revenue plunged. He said he
expected the government to raise about $5 billion from the Eurobond
market and multilateral and bilateral lenders.
Nigeria’s Debt
Management Office last month asked banks to place bids by Sept. 19 if
they wished to manage a $1 billion Eurobond sale. Finance Minister Kemi
Adeosun told bond investors in London in June that Nigeria was close to
securing around $3 billion of funding from the World Bank and African
Development Bank.
Nigeria, which vies with South Africa as the
continent’s biggest economy, has issued dollar bonds twice, the last
time in 2013. Yields on its $500 million of securities due in July 2023
fell 11 basis points to 6.24 percent by 1:01 p.m. in Lagos, their lowest
level since June 2015 and down more than 300 basis points since hitting
a record 9.4 percent on Jan. 18.