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Nigeria eyes growth with offshore funds - THE NATION

APRIL 24, 2024

The Federal Government is pursuing a multi-pronged strategy that includes the issuance of a new Diaspora Bond, a World Bank loan facility and increased engagement with foreign direct investors in a bid to attract foreign exchange (forex) and bolster economic growth.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, revealed plans for a Diaspora Bond during the wrap-up press briefing following the 2024 World Bank-IMF Spring Meetings in Washington DC.  “There are Nigerians abroad who are doing very well. We want to attract those funds through a Diaspora Bond, an instrument we believe will be attractive to Nigerians abroad and foreign currency holders,” Mr. Edun said.

The issuance of the bond, targeted for later this year, aims to capture a significant source of foreign exchange – remittances from Nigerians living abroad.

Beyond the Diaspora Bond, Nigeria secured a $2.25 billion loan facility from the World Bank.  “This is practically a grant,” Mr. Edun emphasized, highlighting the favorable terms: a 40-year repayment period with a 10-year grace period and a low-interest rate of one per cent.

The World Bank-IMF Spring Meetings provided a platform for Nigeria to engage with international investors also.

He said: “We’ve had the opportunity to speak with international portfolio investors and those seeking direct investments that create jobs.” He expressed optimism, stating, “The response from all of them has been one of greater confidence in our economic management and a stronger interest in investing.”

The Finance Minister underlined the government’s commitment to tackling inflation. He pointed to the recent issuance of government securities at rates closer to the Central Bank of Nigeria (CBN’s) Monetary Policy Rate (MPR) as an example of collaboration between fiscal and monetary authorities.

Mr. Edun outlined key areas where the administration is prioritizing growth.

These include: agriculture, by distributing fertilizers and seeds to reduce food prices and ensure food security; power generation, by increasing power generation to 6,000 megawatts within six months; infrastructure development, particularly affordable housing through low-interest mortgages; revamping existing social programs and development of a comprehensive economic stabilization plan.

While international funding is crucial, Mr. Edun emphasized the importance of private sector investment, both domestic and foreign. He reiterated President Bola Tinubu’s commitment to fostering a private-sector-driven economy that creates jobs and reduces poverty.

The Minister highlighted the government’s engagement with a broad range of stakeholders, including: Multilateral organizations (World Bank, African Development Bank); Development banks; bilateral financiers; grant-givers and Foundations (e.g., Bill and Melinda Gates Foundation)

Mr. Edun concluded by expressing optimism for Africa’s role in the global financial landscape.  “We secured an additional Chair position on the Board of Directors of the International Monetary Fund,” he announced. “This is a major win for Africa as a whole.”

The Nigerian government’s multi-pronged approach to attracting forex and stimulating economic growth shows promise. Whether these initiatives achieve their intended goals remains to be seen, but the engagement with international institutions and a focus on private sector investment offer a ray of hope for a more prosperous future for Nigeria and Africa.


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