Connect with us

Economy

Nigeria Consolidates $500m Eurobond with $1bn Issue

Published

on

Federation Account Allocation Committee
  • Nigeria Consolidates $500m Eurobond with $1bn Issue

Nigeria disclosed on Wednesday that its $500 million notes under the $1.5 billion Global Medium Term Note programme will be consolidated to form a single series with the existing $1 billion notes, which the country issued in February and will mature by 2032.

The federal government therefore announced that it has priced its offering of the $500 million aggregate principal amount of notes at a yield of 7.5 per cent under the $1.5 billion (increased from US$1 billion) Global Medium Term Note Programme.

This, according to a statement by the Ministry of Finance, will be consolidated and form a single series with the existing $1 billion 7.875 per cent notes due in 2032.

The N1 billion notes (Original Notes) were issued on February 16. The terms and conditions of the $500 million notes, said the statement, will be identical to those of the Original Notes, paying a coupon of 7.875 per cent per annum and maturing on February 16, 2032.

They will be repayable by way of bullet repayment of the principal together with the Original Notes, the statement added.

“As with the Original Notes, the government intends to use the proceeds of the ($500 million) notes to fund capital expenditures in the 2016 budget.

“The successful pricing, which is priced 37.5bps inside the original coupon rate, demonstrates continued strong market appetite for Nigerian securities.

“This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda,” the statement issued by the Director, Information, Ministry of Finance, Mr. Salisu Na’Inna Dambatta, said.

When issued, the notes will be admitted alongside the Original Notes to the official list of the UK Listing Authority and will trade on the London Stock Exchange’s regulated market.

Nigeria may apply for the notes to be eligible for trading or listed on the Nigerian Stock Exchange and Financial Markets Dealers Quotations Over-the-Counter Securities Exchange.

Pricing of the notes, the statement added, comes shortly after the country unveiled its National Economic Recovery and Growth Plan (NERGP) 2017-2020 on March 7.

The plan focuses on policy objectives in five core areas: macroeconomic policy, economic diversification and growth drivers, competitiveness, social inclusion and jobs, and governance and other enablers.

Key targets under the NERGP include reaching single-digit inflation, further growth in the agricultural sector, reducing unemployment, increasing operational energy capacity and domestic refining capacity, improving transportation infrastructure, and stabilising the exchange rate, with an emphasis on implementation, monitoring and evaluation of these economic goals.

Commenting after the successful pricing, the Minister of Finance, Mrs. Kemi Adeosun, said: “The proceeds from this additional note issuance will go towards funding capital projects in the 2016 budget.

“Infrastructure spending is at the heart of our National Economic Recovery and Growth Plan, which was released earlier this month and guides how we will deliver the urgent reform our economy needs between now and 2020.
“Resetting the Nigerian economy is essential in order for us to deliver sustainable long term growth.”

The Director General, Debt Management Office (DMO), Dr. Abraham Nwankwo, said: “Following the success of our $1 billion note issuance in February, Nigeria is delighted to have increased our 2017 Eurobond programme to $1.5 billion and to have secured the additional $500 million.

“Nigeria was keen to take advantage of favourable market conditions and investors’ appetite for Nigerian debt to complete our foreign borrowing programme for the 2016 budget and deliver further funds for vital capital projects.”

Citi and Standard Chartered acted as Joint Lead Managers and Stanbic IBTC as Financial Advisers on this issue.

Also, the finance ministry announced that the Central Bank of Nigeria (CBN) has approved a licence for a wholesale Development Finance Institution (DFI) with national authorisation to the Development Bank of Nigeria (DBN) Plc.
Adeosun confirmed the issuance of the licence, a statement from the ministry said on Wednesday.

According to the statement, the approval was conveyed in a letter addressed to the Managing Director/Chief Executive of Officer of DBN dated March 28, 2017.

The letter was signed by the Deputy Governor of the CBN in charge of Financial System Stability.

The approval was subject to meeting the minimum capital requirement of N100 billion, the reconstitution of the board of the bank and a review of its organogram.

The DBN was conceived in 2014, however its take off has been fraught with delays.

The Muhammadu Buhari administration inherited the project, but was determined to resolve all outstanding issues and set a target of 2017 for its take-off.

The finance minister had said previously that the DBN would have access to $1.3 billion which will be jointly provided by the World Bank (WB), KfW (German Development Bank), the African Development Bank (AfDB) and the Agence Française de Development (French Development Agency).

The bank is also expected to finalise agreements with the European Investment Bank (EIB).

She also stated that the DBN would provide loans to all sectors of the economy including manufacturing, services and other industries not currently served by existing development banks, thereby filling an important gap in the provision of finance to micro, small and medium enterprises (MSMEs).

As a wholesale bank, the DBN will lend wholesale to microfinance banks, which will on-lend to medium to long-term loans to MSMEs.

MSMEs contribute about 48.47 per cent to Nigeria’s Gross Domestic Products (GDP), but have access to only about 5 per cent of lending from Deposit Money Banks (DMBs).

The federal government expects that the influx of additional capital from the DBN will lower borrowing rates while the longer tenure of the loans will provide the required flexibility in the management of cash flows, giving businesses the opportunity to make capital improvements and acquire equipment and supplies.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

France, Nigeria to Build New Partnership

Published

on

France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.

Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.

A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.

“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”

It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.

It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.

It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.

It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”

Continue Reading

Economy

COVID-19: USAID to Provide $3m Grant, Technical Assistance to Combat Food Insecurity in Nigeria

Published

on

The United States Agency for International Development (USAID) is providing financial grant and technical assistance worth $3 million to combat food insecurity in Nigeria compounded by COVID-19 pandemic.

A statement by the agency on Monday said: “On April 12, 2021, the U.S. Agency for International Development (USAID) in Nigeria launched a COVID-19 Food Security Challenge that will provide $3 million in grant funding and technical assistance to youth-led and mid-stage companies working in food value chains in Nigeria.”

The statement lamented that Nigeria is experiencing food insecurity compounded by the COVID-19 global pandemic and its effects on the food value chain in the country.

It stated that the pandemic has disrupted the already fragile agricultural value chains, especially smallholder farmers’ ability to produce, process and distribute food, which has disrupted agricultural productivity and markets, and negatively impacted livelihoods, especially among vulnerable households, women and youth.

The USAID Mission Director, Anne Patterson, said: “We are launching the COVID-19 Food Security Challenge to help innovative Nigerians alleviate food insecurity.

“This assistance encourages private sector-led solutions to boost food production, processing and create market linkage along the agriculture value chain in a sustainable way across Nigeria.”

The statement revealed that in launching the challenge, USAID seeks commercially viable youth-led and mid-stage companies already working in food production, processing, and distribution, noting that successful applicants will present ideas that demonstrably help farmers and other stakeholders in the agricultural value chain increase, agricultural productivity and food security within the next six months.

According to the statement, the challenge will award 15 to 25 youth-led companies up to $75,000 each and award 10 to 15 mid-stage companies up to $150,000 each.

Winners will receive funding and technical assistance to rapidly expand their activities to mitigate the effect of COVID-19 on Nigeria’s food value chain and improve the resilience of vulnerable households to the negative impacts of the pandemic.

Continue Reading

Economy

FG Plans to Deliver Solar Energy to 25M Nigerians

Published

on

The Nigerian federal government has commenced its plan to deliver electricity through solar energy to Nigerians whose communities are off the national power grid.

Vice President Yemi Osinbajo, who spoke during an event to mark the programme in Jangefe, Roni Local Government Area of Jigawa State, restated the determination of the President Muhammadu Buhari administration to give more Nigerians access to cheap and environmentally friendly renewable power.

Osinbajo said the Solar Power Naija programme would continue across the six geopolitical zones in six states, namely, Edo, Lagos, Adamawa, Anambra, Kebbi and Plateau, in the first phase, and then move to the entire 36 states and the nation’s capital, thus, covering 25 million Nigerians at completion.

Jangefe community got 1,000 solar home system connections for its about 5,000 population, as part of a 100,000 scheme, with a local solar power company implementing aspects of the scheme.

According to Osinbajo, the president had emphasised that Nigeria could no longer rely solely on the grid if government is to electrify the whole country, which meant that an effective strategy had to be developed for decentralising power supply.

The Solar Power Naija programme, which is designed by the Rural Electrification Agency (REA), is an ambitious initiative that aims to create five million connections through a N140 billion financing programme that will support private developers to provide power for five million households, which means providing electricity for up to 25 million Nigerians.

The vice president disclosed that the programme was a Public Private Partnership (PPP) arrangement supported by concessionary lending via the Central Bank of Nigeria (CBN) and commercial banks. He emphasised that structures had been put in place to make the cost of the connections affordable for the target communities.

In addition to the concessionary lending rates, Osinbajo explained that the government had provided subsidies and rebates for private developers to the tune of over $200 million under the REA and World Bank Nigeria electrification programme.

Continue Reading

Trending