The Federal Government has allayed fears that its increasing recourse to foreign-currency denominated bonds may pose considerable currency risk and debt crisis as government has taken measures to ensure that it maintains a prudent and sustainable debt strategy.
Debt Management Office (DMO) Director-General, Ms Patience Oniha, who spoke at the listing of Federal Government’s Eurobonds and Diaspora Bond at the Nigerian Stock Exchange (NSE) in Lagos, said Nigeria would not be subjected to any considerable foreign currency risk given foreign exchange earnings from its crude oil and ongoing efforts to diversify the economy.
According to her, besides the foreign exchange earnings from crude oil, the country stands to gain increased foreign exchange earnings from the ongoing economic diversification programme.
The NSE admitted the FGN 30 year $1.5 billion Eurobond, FGN 10 year $1.5 billion Eurobond, FGN 5 Year $300 million Diaspora Bond on its daily official list.
She said government would continue to implement a prudent fiscal and debt management strategy to reduce the cost of debt, rebalance its debt and attain a portfolio of 60:40 foreign/domestic debt structure over the coming years.
Oniha assured that the DMO would sustain its innovative and diverse fund raising plans to ensure optimal funding structure for Nigeria to address key infrastructural challenges.
She said the continuing listing of government’s domestic and foreign debt issues on the stock market underscored the commitment of the government to the capital market and recognition of the importance of the market in national economic development.
She noted that amid uncertainties, the government has so far this year accessed the international capital markets four times in 2017 and at every issue, it had achieved overwhelming success.
Oniha explained that funding the budget deficit and refinancing the government’s inherited debt portfolio have been the key drivers behind the capital raising plans so far, adding that these will lead to significant benefits, particularly in reduction of cost of funds.
She noted that the Diaspora bond provided opportunity for Nigerians in Diaspora to contribute to the development of the nation.
Nigerian Stock Exchange (NSE) Chief Executive Officer, Mr. Oscar Onyema, said the Exchange would continue to collaborate with the government in the development of Nigerian debt market.
“We would be coming up with other types of products that will give the investors a good menu of options in terms on how to diversify portfolio,” Onyema said.
At the listing of the Eurobonds and Diaspora Bond at the FMDQ OTC Securities Exchange, Oniha said the listings would increase the number and range of securities in the domestic capital markets, thereby deepening the market and promoting financial inclusion.