Market News

Nigeria plans to start issuing domestic foreign currency-denominated bonds from the second quarter of this year, the finance minister said on Wednesday, as Africa's biggest economy seeks to attract more forex inflows to stabilise its currency.

Nigeria has struggled with dollar shortages, which have pushed the naira currency to record lows.

Edun said last October President Bola Tinubu had signed executive orders to allow domestic issuance of instruments in foreign currency and also allow all cash outside the banking system to be brought into the banks.

He told business leaders in Lagos on Wednesday that the government would seek to sell forex bonds to Nigerians at home and abroad who, "because of lack of faith in the currency, have decided to try to hold and save in dollars."

"All the funds in the diaspora, we are targeting them. There are all these funds that you have brought into your (local foreign currency) accounts, we are targeting them," said Edun.

Edun said the government had not issued the bonds earlier because it sought to first build confidence in its fiscal policy and gain the trust of citizens who are sceptical of government policies.

Nigeria has struggled to raise revenue to fund its national budget largely due to a decline in oil output, which authorities blame on pipeline vandalism, crude theft and low investment.

That has left the government relying on debt to plug the deficit, increasing the total government debt to $108 billion at the end of 2023.

Nigeria spends around 78% of its revenue to service debt and the government wants to reduce this to around 50%.

"When they say what keeps you awake at night, I will say paying the debt service (cost)," said Edun.