President Buhari desperately wants National Assembly to approve the selling of the Eurobonds this year after staying completely out in 2019.
Buhari wants $3.3 billion out of which he intends using $2.8 billion for external financings for the 2020 budget while injecting $500 million into debt refinancing, according to Finance Minister’s spokesman, Yunusa Abdullahi.
The minister’s spokesman said that the government will embark on an international roadshow immediately lawmakers endorse the president’s application.
Meanwhile, Nigeria’s Finance Minister Zainab Ahmed hinted in December that, Africa’s most populous country could issue Eurobonds in the first quarter of 2020 to be able to finance the 2020 budget, but would, however, first discuss with concessional lenders before concluding.
When there is new external issuance it may possibly help Nigeria’s central bank to rebuild international reserves which have fallen to the lowest level in twenty-four months as authorities defended the naira, which has come under severe pressure.
An adverse effect of Coronavirus outbreak in China could be seen on the dragged down of global oil prices by nearly 17%, which is below the Nigerian government’s average of $57 per barrel in its 2020 budget projection.
When approved by lawmakers, Nigeria will join Gabon, one of the lowest-rated sovereigns in Africa, and Ghana, West Africa’s second-biggest economy, which sold Eurobonds in recently as investors ignore the possible impact the coronavirus outbreak could pose on highly indebted African economies.
There is also a possibility that Benin may offer euro-denominated bonds this year after selling a first offshore bond of 500 million euros ($548 million) in March last year.
According to The International Monetary Fund, African governments rapid buildup of commercial debt makes them vulnerable to the whims of international investors which are now thirsty for returns in a world awash with negative yields.
Africa as a whole reportedly raised a record $30 billion in Eurobonds in 2018.