Market News

By Tope Alake, Ruth Olurounbi, and Francine Lacqua

•  Government considering participation in G-20 debt initiative
•  Country may issue Eurobond next year, depending on conditions

Nigeria has fulfilled the conditions for a World Bank loan and is in the final stages of closing the deal, according to Finance Minister Zainab Ahmed.

The lender’s board will discuss the $1.5 billion loan package at their next meeting and possibly approve the request, Ahmed said in an interview Friday with Bloomberg TV. Nigeria’s senate approved the borrowing plan from the multilateral institution in June.

Africa’s most-populous country is also considering joining the G-20 debt-relief initiative and is talking to commercial lenders to secure their backing, she said.

“We will consider joining as long as it is safe for us to do so,” Ahmed said. Nigeria couldn’t participate initially because some of the conditions were unfavorable for existing loan commitments with bilateral lenders and other international borrowings.

Other highlights from the interview with Ahmed:

• Nigeria may tap the Eurobond market next year, depending on interest rates. The government has to date taken advantage of good demand and liquidity in the domestic market to raise money.
• The central bank has cut interest rates to stimulate activity in the private sector and reduce possible job losses as a result of the coronavirus pandemic.
• Africa’s most populous nation will exit recession by the end of year.
• The government is concerned about the widening gap in the naira’s exchange rate on the official and parallel markets.
  • “We have been taking measures to close the gap. We hope to get to an even level very soon so the impact of the exchange rate will become moderated”
• Ahmed sees the administration of U.S. President-elect Joe Biden supporting Nigeria’s Ngozi Okonjo-Iweala bid to head the World Trade Organization.

(Updates with other highlights from interview with finance minister)