Nigeria’s fast depleting foreign reserves occasioned by growing propensity to defend the Naira and lack of project specification, among others are casting dark clouds on the country’s current to raise $3.3billio Euro-bond from the international market.
While some analysts believe that the current level of foreign reserve is below psychological level and the fact that the reason for the loan is vague are sending hitters to the international community who are craving for transparency and comfort.
The development, according to them is without prejudice to successful outings by some African countries in recent times.
The Finance Minister, Zainab Ahmed said recently that the borrowed funds will be partly used for funding the 2020 budget.
However” according to analysts at the Financial Derivatives Company, ” At a time of depleting external reserves and falling oil prices, Nigeria is approaching the international capital markets to raise $3.3billion. . It will be interesting to see investor reaction to the Federal Government’s attempt to raise money for general borrowing and not for project specific financing.”
Similarly, most Nigerians have in recent times spoken against what they consider as the insatiable appetite by the Federal government for loan, basically for consumption.
However.Nigeria is not alone in the debt raising scramble amongst African countries. Ghana recently recorded a successful Eurobond sale ($3billion) which was five times oversubscribed.
This is in spite of the closeness to the country’s next election in December, 2020. The success is evidence of investor confidence in its reform policies and business friendly environment.
Other African countries including Gabon and Benin Republic are also in the fray for debt raising at the Eurobond market.
