Nigeria to Launch $500 Million Dollar-Denominated Security to Attract Foreign Investments
Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, announced that the federal government plans to issue its first dollar-denominated security worth $500 million within the next 3-4 weeks. This initiative aims to attract foreign currency held by Nigerians abroad. Depending on the success of this issuance, the government currently has no plans to raise euro bonds from the international market.
During a press briefing in Abuja on Thursday, Edun stated that the Federal Government has enhanced its fiscal management, leading to a positive economic outlook with a stable exchange rate and a favorable trade balance.
He emphasized that the Central Bank of Nigeria (CBN) has proactively adjusted the monetary policy rate to address inflation in line with its legal mandate. This adjustment has begun to yield results, as indicated by the month-on-month reduction in the inflation rate. The CBN’s shift to a willing-buyer, willing-seller model has also reduced exchange rate volatility and improved foreign exchange trading volumes.
“We are optimistic that inflation, despite being sticky at the moment, will moderate soon due to some of our commitments,” Edun said. “The gap between inflation and interest rates is narrowing, making the Naira more viable as a store of value and reducing the incentive to switch to non-Naira investments.”
Edun noted that this improved liquidity and availability of foreign exchange have contributed to the convergence of the NAFEX rate and the parallel market rate, effectively resulting in a unified exchange rate. He highlighted that the improved investment climate has attracted both domestic and foreign investments, which are crucial for increasing productivity, creating jobs, and reducing poverty.
Edun concluded, “The ultimate aim of Mr. President’s macroeconomic measures is to stabilize the economy to encourage investment, both domestic and foreign, which will lead to increased productivity, job creation, and poverty reduction.”
