Five years after the first outing with diaspora bonds, Nigeria is considering the second one with another bond sale targeted at its citizens overseas to raise funds to help Africa’s biggest economy narrow its budget deficit.
The 2017 outing by Africa’s biggest crude producer was meant to boost funding for development projects as well as provide a channel for citizens abroad to contribute to economic growth.
But, the good 'old' days are gradually fading as the most populous African country is now on aggressive revenue drive to fund budget deficit running to a whooping four percent of the nation's gross domestic products, (GDP).
The economic managers and security agents are battling crude oil theft and vandalistion of pipelines that have assumed worrisome dimensions in recent times.
According to Bloomberg, Nigeria can only see the debt to the 'worried and divided' diasporans, after it repays $300 million of diaspora bonds maturing in June, according to Patience Oniha, director-general of the Abuja-based Debt Management Office.
“We are doing both an analysis of recent research report on diaspora remittances and reviewing offshore regulations for changes that may be supportive of offering products to retail investors,” Oniha said in a text message on Thursday.
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In fact, issuing a second diaspora bond has been delayed due to “regulatory constraints,” Oniha said, without explaining. Resolving the challenges, “is not a one-day activity,” she further said.
Nigeria’s need for borrowing has increased following additional spending to help the economy recover from the impact of the Covid-19 pandemic and Russia’s war on Ukraine.
The government expects this year’s deficit will widen by an extra 965 billion naira ($2.3 billion) to 7.35 trillion naira, amounting to about 4% of gross domestic product.
