The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said that the Nigerian government will begin issuing a dollar-denominated security of $500 million in the coming weeks.
The Minister said the government targets the foreign currency Nigerians hold abroad to stabilize the Nigerian economy.
Edun said that depending on the success of the bond issue, the government has yet to make plans to raise euro bonds from the international market.
The Minister stated this during a press briefing in Abuja on Thursday, July 25, 2024, noting that it has become essential for Africa to depend on its resources, including the resources of Nigerians and Africans in the diaspora.
The finance minister said the Nigerian government is using the financial system, the Securities and Exchange Commission (SEC), and the banking system to issue the $500 million bond. This will attract foreign currency held by Nigerians in the diaspora and anybody who buys into the Tinubu government’s economic reforms.
Edun said:
According to reports, Edun said that Nigeria has recorded improvements in its fiscal management. The economy has improved, leading to a stable FX rate and a positive trade balance.
The Minister said that the Central Bank of Nigeria (CBN) has been foreseen to adjust the monetary policy rate to address inflation.
Recall that the apex bank increased the benchmark interest by 50 basis points to 26.75% from 26.25% to rein in inflation.
Diaspora remittance has played a pivotal role in forex inflows into Nigeria, with the CBN saying that the country recorded improved inflows in 2024.
According to reports, Nigeria recorded $282.61 million in total FX remittances in the first quarter of 2024.
Data from CBN shows that total diaspora remittances stood at $297.4 million as of June 2024.
Diaspora remittance refers to money transfers from Nigerians to family members and other individuals in the country through formal channels.
Experts believe the move to raise dollar bonds would improve the naira’s performance against the dollar.
The Nigerian currency crashed to a four-month low on Thursday, July 25, 2024, trading at N1,603 per dollar.
Chuks Ibeh, a financial analyst, says Nigerians living abroad can now invest their forex into the dollar bond instead of losing money through informal channels.
He said:
TimesNow.com.ng earlier reported that a day after the central bank increased interest rates once more to combat inflation and defend the value of the country’s currency, Nigerian Treasury bills were auctioned off on Wednesday at a record-high yield.
Treasury Bills, also known as T-Bills, are government-backed, short-term securities issued by the CBN. According to Cowrywise, they are issued when the government needs to borrow funds for some time.
