FG targets $500m in first domestic dollar bond

The federal government, through the Debt Management Office (DMO), yesterday unveiled its N500 million dollars local bond to boost dollar liquidity and support the economic recovery plan. Minister of Finance and the Coordinating Minister for the Economy, Mr. Wale Edun who spoke at a roadshow for the domestic FGN US Dollar Bond insisted that the […]

The federal government, through the Debt Management Office (DMO), yesterday unveiled its N500 million dollars local bond to boost dollar liquidity and support the economic recovery plan.

Minister of Finance and the Coordinating Minister for the Economy, Mr. Wale Edun who spoke at a roadshow for the domestic FGN US Dollar Bond insisted that the economy is on a strong recovery trajectory.

According to him, the newly introduced US Dollar bond was aimed at improving the external reserves and supporting the exchange rates, which were critical elements of stabilising the economy.

He stated that the macroeconomic reforms started in May 2023 by President Bola Tinubu have started yielding fruits, adding that the exchange rate is stabilising while the trade balance is also positive.

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“The flow of dollars has improved into the economy from portfolio investors, from foreign direct investment and from multilateral mobilisations, which have bought into Mr. President’s macroeconomic reforms.

“This transaction plays an important role in this process because we have a domestic issuance of dollar bonds aimed at further improving the inflow of dollars.

“The more the foreign exchange, the higher the foreign reserves, the stronger would be the exchange rate. That gives a chance for inflation to come down. The lower the inflation, the lower the exchange rate,” he said.

He disclosed that to reduce the pains of the current reforms on the poor of the poorest and the vulnerable, the federal government has provided several interventions like the cash transfer, the recent import duty waiver on imported food items, grants to micro, small and medium enterprises (MSMEs) at nine per cent, among others.

“The interventions are there to assist the poor during this transition period when the macroeconomic reforms are not yet showing the benefits,” he said.

The minister however appealed to Nigerians with significant savings abroad as well as those in the Diaspora to subscribe to the bond.

“This is the time to back your own country, this is the time to buy a well-structured, profitable, safe, competitive investment. Rather than keeping your money abroad, provide it to the Nigerian economy to create jobs, reduce poverty and support the macroeconomic reforms. This is what this is all about.”

Providing further insight on the bond, the Managing Director – Investment Banking, United Capital Plc, the lead advisors for the transaction, Mr. Gbadebo Adenrele, said that the target for the transaction was 500 million dollars for a period of five years.

It has a minimum of $10,000 with the multiples of $1000 thereafter and it is targeted at Nigerians and non-Nigerians resident in Nigeria; Nigerians in Diaspora and Qualified Institutional Investors.

“The bonds will qualify as securities issued by the Federal Government of Nigeria and as such will be exempted from taxes…,” he added.

The Director-General of DMO, Patience Oniha, encouraged Nigerians to take advantage of the opportunity and invest in the dollar denominated FGN bond, adding that it was safe and secure.