FG Set To Issue Eurobond Worth $1bn

The Federal Government is set to issue a Eurobond worth $1 billion next year to fund its power and gas sector reform taking advantage of the country’s likely inclusion in a JP Morgan Emerging Market Index.

Finance Minister, Dr Okonjo-Iweala disclosed this, in an interview with newsmen recently. She said her long term target was to scrap the country’s Excess Crude Account (ECA) and replace it with a planned Sovereign Wealth Fund.

The minister further explained that if JP Morgan’s statement on August 15 that Nigeria is likely to be included in JP Morgan’s Government Bond Index Emerging Markets (GBI-EM) from October is anything to go by the development would open fresh opportunities for issuance of bond.

She noted, “we are thinking next year of an infrastructure bond to help our power and gas sector. It will be anywhere from $500 billion. We are trying to see if we can do something unique by having a portion as a Diaspora bond.”

Okonjo-Iweala pointed to Nigeria improved her credit ratings in the past year.

She said effort had been made to “steady the ship” since she took office a year ago, including reducing the fiscal delicate to 2.85 per cent of GDP this year from 2.95 per cent last year, with a view to cutting it down to 2.21 per cent in 2013.