Barclays Capital has been appointed as adviser to Nigerian Governemnt on the sale of a $500 million Eurobond.
Nigeria, the latest in a line of African countries to try to raise finance from the global debt markets, wants to fund objectives such as its substantial $100 billion infrastructure deficit.
African countries including Nigeria, Ghana and Kenya are among the countries that earlier indicated plans to launch Eurobonds but had put it on hold due to the global financial crisis.
The Federal Government had announced the plans to issue a $500 million in 10-year sovereign bond in September 2008, but the plan was put on hold until the economic environment improved, the finance minister had said in March.
The National Assembly had approved spending of more than N4.8 trillion this year, up more than 50 per cent on last year, meaning the country’s budget deficit is set to widen to more than five per cent of the Gross Domestic Product (GDP).
The monthly disbursal of oil revenues and windfall savings known as the Excess Crude Account (ECA) to the three tiers of government has left the account into which the country is meant to save windfall oil revenue, with just $460 million compared to $20 billion at the beginning of the current presidential term in 2007.
Nigeria’s foreign exchange reserves stood at $36.6 billion as at September 13, 2010, representing a decrease of $0.50 billion or 1.3 per cent when compared with the level of $37.16 billion as at end-July 2010.
The reserves have fallen from around $43.3 billion a year ago due to demand pressure from importers. The current level could nonetheless finance about 17 months of import bills.
Aganga said Nigeria was on track to achieve GDP growth of at least 7 per cent this year after the country’s economy grew by 7.4 per cent in the first half. He said 10 per cent growth by the end of next year was “doable”.