Guardian Life Guardian TV Facebook Instagram Twitter

Government officals, experts differ on $1b eurobond floatation

By Mathias Okwe (Assistant Business Editor), Abuja   |   12 February 2017   |   4:20 am

Nigeria’s finance minister Kemi Adeosun PHOTO: PHILIP OJISUA

Economists Seek Alternative Development Concept

Development economists and government officials were divided last week, over subscription of Nigeria’s $1b Eurobond issue, which was celebrated in government circles.

While some feel that given the size of the economy, it ought to have raised more than $1b, others believe the accumulation of more debt in hard currency would have negative implication on the economy, especially the ability to repay some years down the line and given the era of failing oil and other commodities prices globally.

Minister of Finance, Mrs. Kemi Adeosun, last Thursday, had joyfully announced that Nigeria’s US$1b Global Medium Term Note programme issued at a coupon interest rate of 7.875 percent, which will mature on February 16, 2032 with a bullet repayment of the principal, was hugely successful, having been over- subscribed by almost eight per cent, signifying investors’ confidence and appetite for investment in Nigeria.


Also commenting on the notes’ pricing, the Debt management office (DMO) Director General, Dr. Abraham Nwankwo said: “Nigeria is delighted to have successfully priced its third Eurobond issue. We have successfully extended the tenor of our borrowing programme in the international capital markets to 15 years, at a price that reflects belief in the quality of Nigeria’s cash flows and government.”

However, some economic and financial pundits have been reacting to the development with mixed feelings. Some of them are saying the $1b raised was just a flash in the pan and may not record the desired impact Nigeria is seeking in its recession era.

A development economist, Mr. Odilim Enwegbara, queried the country’s preference for Eurobond, which is more expensive, when it could have raised more funds at a cheaper rate from China and other sources. He observed that the $1b was nowhere near addressing Nigeria’s scarce foreign exchange challenges at the moment.

He would prefer that the funds so raised be dedicated to identified and specific projects for everybody to see, and not put it in a pool for the implementation of the budget, which may remain unaccounted for, as has been the practice in the country.

However, in a divergent view, another development economist and National Coordinator Fix Nigeria Campaign Organisation, Dr. Emmanuel Analiefo, declared that the attraction of the Eurobond issue debt of $1b was not the right thing for government to have done at the moment, as the implication would further compound her woes.

He told The Guardian that he said what government needed to do was seek fresh ideas from people outside government, which would produce an alternative development plan that would ultimately address the nation’s challenges on a permanent basis.


Analiefo explained that the issue was over-subscribed because the global community, particularly advanced countries, have so much money and they are looking for opportunity of where to invest them.

He said: “If they invest it here, it is a debt you owe them, and if you don’t pay them, at least you will be servicing it. By the time you service the debt for about 10 years, you would have paid for the initial sum and the money still remains, yielding profit for them. Of course, they have a system to guide their people as to where to invest in other countries, once they are satisfied that the opportunities are right. So, they have nothing to lose.

“But what should concern us is the implication for our own economy in the medium and long term, or even in the immediate term. The problem here is that this new loan is killing the economy gradually. In the next couple of years, the money to service the loan will be a problem, because the money generated from crude oil will not be enough to service the loan.“That is why I insist we don’t have any other option, unless we diversify the economy.”


In this article:
Kemi Adeosun


  • Ezekiel Okeke

    They said is for infrastructure, the west and north that want to borrow it should also use it for infrastructure in the west and north and shoulder the debt- eastern region of Republic Of Biafra has nothing to do with it.

  • Mazi JO

    The debt instrument is already floated on the obligation of the Nation. Don’t go out gloating on the oversubscription. Rather, work assiduously to make sure there is 100% delivery on its projected use. No Debt is a good one unless it yields on its development intentions and National auspices. I hope there are plans; I mean exquisite plans, to maximize its burden. Go to work don’t cry now. It seems things are looking up. Join the wave.

You may also like