Nigeria to issue $1.7 billion Eurobond to finance 2024 budget

The Nigerian government has announced plans to raise $1.7 billion through Eurobond issuance to cover revenue shortfalls in the 2024 budget, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy.

Speaking at the State House in Abuja, Edun disclosed that an additional $500 million will be sought through Islamic Sukuk bonds, marking the government’s intent to leverage international capital markets for budgetary support.

The 2024 budget, totaling N28.7 trillion (about $17 billion), faces a deficit of N9.1 trillion ($5.2 billion), primarily to be financed by borrowing. Although issuance dates for these bonds were not disclosed, Edun noted that the borrowing plan would be submitted to the National Assembly within the year, aiming for prompt approval.

“This new borrowing aligns with the Nigerian 2024 Appropriation Act as amended,” Edun stated.

The planned Eurobond issuance will serve to reintroduce Nigeria to international debt markets, which could increase the country’s external debt—currently at $42.9 billion, about 39% of Nigeria’s total debt stock. Nigeria’s domestic debt reached N66.9 trillion by mid-2024, comprising around 60% of the total debt.

The country’s earlier strategy in 2024 included a $900 million domestic dollar-denominated bond issuance, a shift in focus towards managing debt costs through local markets. However, revenue deficits driven by lower crude oil output have made the case for foreign borrowing more pressing. Edun previously indicated reluctance to issue a Eurobond, citing high debt servicing costs associated with dollar-denominated debt, especially amid naira devaluation.

The International Monetary Fund (IMF) raised concerns over Nigeria’s foreign currency debt strategy, cautioning that such moves could add pressure on the naira and potentially fragment the market.