Nigeria is laying the groundwork for a major return to the international bond markets with plans to raise an estimated $2.3 billion before the end of the year. This ambitious effort represents the country’s second outing since December 2023, when it ended a lengthy three-year hiatus from issuing Eurobonds by successfully raising $2.2 billion. The move signals renewed confidence from policymakers about Nigeria’s access to global financing as well as evolving fiscal strategies in a rapidly changing economic environment.
Additionally, on the horizon is Nigeria’s first-ever sukuk bond issuance on the international market, valued at $500 million. Sukuk bonds, which comply with Islamic finance principles, have grown in popularity across Africa as countries seek to diversify their borrowing base and attract new pools of investors looking for Sharia-compliant investments.
Patience Oniha, the director-general of Nigeria’s Debt Management Office (DMO), stated in a recent Bloomberg interview that “there are plans to issue Eurobonds in the fourth quarter of 2025, subject to market conditions.” She went further, explaining: “In terms of what we need, it’s $2.3 billion,” clarifying that the pricing of these securities will be largely determined by their specific tenors and the prevailing conditions at the time of issuance.
This planned fundraising forms part of Nigeria’s broader strategy to shore up its public finances, manage government expenditure, and refinance maturing debts. Notably, President Bola Tinubu has asked the National Assembly to approve the same amount in foreign loans, which would help bridge gaps in the 2024 federal budget and address Eurobond maturities set to come due in the near term. The President’s request to lawmakers specifically highlights the government’s intention to balance immediate funding needs with prudent fiscal management, aiming to avoid a situation where critical obligations are missed or rolled over at unfavorable terms.
Nigeria’s fresh push into the international debt markets mirrors a broader trend among African nations. Several countries are pivoting towards more expansionary monetary and fiscal policies to stimulate growth amid rising economic pressures. This is a sharp reversal from the contractionary stance typically adopted to curb inflation. The current environment, characterized by global financial volatility and shifting risk appetite, has left many African governments weighing the costs and risks of borrowing abroad against the urgent need for capital to finance infrastructure, strengthen reserves, and drive development projects.
For example, both Kenya and Angola have recently made headlines with their successful Eurobond issuances. Kenya’s central bank made a surprise move on Tuesday by cutting its policy rates for the eighth consecutive time—an approach intended to make borrowing cheaper and spur economic activity. Angola, for its part, also tapped the Eurobond market, raising substantial funds last week that are expected to support its ongoing economic reforms and public investment efforts.
Nigeria joined this trend in September 2023 when the Central Bank of Nigeria implemented its first lending rate reduction after five years of consistent monetary tightening. This previous period of tightening sought to battle double-digit inflation and was marked by a sharp 8.8 percentage point rise in the Monetary Policy Rate (MPR), which peaked at 27.5%. With inflation pressures persisting but slightly moderating, Nigeria—like many of its African peers—appears ready to leverage more flexible policies to stimulate growth and attract fresh capital.
“These policy maneuvers are not without risk,” explained Ifeoma Odili, a financial analyst based in Lagos. “Global borrowing costs remain elevated, and investor sentiment can shift rapidly in response to changes in US and European interest rates. However, Nigeria’s large economy and significant population make it an attractive destination for investors seeking exposure to Africa’s long-term growth story.”
The introduction of the sukuk bond is particularly noteworthy for Nigerian and regional investors, as it could serve as a model for other West African nations looking to diversify their sources of capital. “By tapping into the Islamic finance market, Nigeria is broadening its funding options beyond traditional Western lenders,” said Abdulmalik Sani, a capital markets specialist in Abuja. “This move also lets Nigeria build stronger financial bridges across the Muslim-majority Northern states and with international investors from the Middle East and Southeast Asia.”
Local economists point out that while external borrowing can provide much-needed funds for vital projects—such as roads, power plants, and schools—excess reliance on foreign debt carries real risks. These include currency mismatch problems (as most Eurobonds are denominated in US dollars), rising debt service costs, and increased vulnerability to global financial shocks as well as local currency depreciation.
According to statistics from the DMO, Nigeria’s public debt portfolio stood at N87.9 trillion (around $113 billion) in September 2023. External debt accounts for a sizeable but manageable portion, and officials have repeatedly emphasized the importance of maintaining sustainable debt service ratios. In comparison, Ghana’s repeated trips to the bond market and subsequent debt challenges have served as a cautionary tale for regional policymakers, reinforcing the need for credible repayments plans and clear investment strategies tied to public borrowing.
In terms of reaction on the ground, market participants and business operators have voiced cautious optimism. “If managed transparently and invested wisely, borrowing on international markets can help address Nigeria’s infrastructure deficit and unlock economic potential,” stated Funmi Balogun, CEO of a Lagos-based manufacturing firm. Nevertheless, she warned that “a lack of accountability or inefficient use of funds could increase the burden on future generations and erode public trust.”
International observers are also watching closely. Nigeria’s economic stability and reforms are seen as a bellwether for the wider West African region, influencing investor sentiment from Accra to Abidjan. The outcome of these planned bond sales—and their impact on job creation, currency stability, and inflation—will have regional implications for years to come.
Finally, with fiscal pressures mounting and projects waiting in the wings, stakeholders across the public and private sectors are closely monitoring decisions regarding Eurobond and sukuk issuances. The government faces the ongoing challenge of maximizing the benefits of borrowed funds without jeopardizing macroeconomic stability or passing undue burdens onto future generations.
What do you think—can Nigeria’s renewed engagement with international debt markets deliver sustainable growth, or is there a risk of overreliance on foreign borrowing? Share your thoughts in the comments below and stay connected for further updates!
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