Nigeria is finalizing plans that will see it issue a Eurobond in the first quarter of 2017, a first since 2013 for the Africa’s second biggest economy.
The $1 billion Eurobond is part of the government’s efforts to plug a growing budget deficit and stimulate growth in its economy, which slumped into recession in August.
The rise in global oil prices last week to $55, the highest this year and expectations within the international community that the struggling economy is adopting reforms in efforts to secure both bilateral and multilateral lenders are expected to improve Nigeria’s position in global capital markets, Financial Times reported.
Standard Chartered, Citi and Stanbic IBTC are spearheading the eurobond sale.
In October, the World Bank said that it would not grant loans to the West African nation until 2017, for failure to adopt critical reforms to boost its macroeconomic resilience, Punch reported.
The global fall in oil prices since 2014, a drastic reduction in oil production due to militant attacks that damaged key pipelines in the Niger Delta region and a foreign exchange shortage disrupted Nigeria’s efforts to generate funds through the bond market this year.
Nigeria’s economy is facing its worst crisis since 1991, which deepened after investor confidence took a dip due to the fall in prices for existing debt.
The inflation rate grew to an 11-year high of 18.3 percent last month, and a dollar shortage hit the importation capacity of firms, forced several companies to reduce operations, cut down on employee size and some airlines exited the Nigerian market due to losses in ticket sales.
United Airlines of the US and Iberian Air of Spain stopped flights to the nation in June, Bloomberg reported.
Emirates Airline and Kenya Airways suspended flights to the capital, Abuja in October and November respectively.
Chronic power outages have also compounded Nigeria’s economic crisis.
High costs of fuel have forced many manufacturers to reduce their operations and derailed President Muhammadu Buhari’s efforts to diversify the economy from reliance on crude oil exports, Reuters reported.