October 17, (THEWILL) — Nigeria is finalizing plans to issue a $2.3 billion Eurobond before the end of 2025 to refinance part of its external debt and enhance fiscal stability amid tightening global financial conditions.
According to senior officials at the Federal Ministry of Finance, the planned Eurobond — Nigeria’s first since 2021 — is part of a broader debt management strategy aimed at reducing domestic borrowing pressure and lengthening the country’s debt maturity profile.
The Debt Management Office (DMO) confirmed that proceeds from the planned issue will not fund new expenditure but will be used to refinance existing high-yield obligations.
The move, the agency noted, will help free up liquidity, stabilize debt servicing costs, and signal fiscal prudence to international investors.
The planned Eurobond comes as global investors show renewed appetite for emerging-market debt following easing inflation and interest rate cuts by major central banks.
However, Nigeria could still face tough pricing conditions, with yields on comparable African sovereign bonds, including Ghana, Kenya, and Egypt, remaining high due to perceived credit risks.
Nigeria’s Eurobond yields currently trade between 8.2% and 10.5%, depending on maturity, suggesting the country may pay close to or above 9% for the new issue if market sentiment remains unchanged.
The Eurobond plan is part of the government’s broader efforts to stabilize its fiscal position after years of deficit spending driven by fuel subsidies, low oil production, and exchange rate reforms.
Public debt rose to ₦121.67 trillion ($94.5 billion) as of June 2025, according to the DMO, a 12% increase from the previous quarter. External debt accounts for about 40% of that figure, largely denominated in dollars and euros.
By refinancing part of these obligations, Nigeria hopes to ease short-term repayment pressure and create fiscal space for infrastructure and social investment projects.
Ahead of the issuance, government officials are expected to embark on a non-deal roadshow in London, New York, and Dubai to engage institutional investors and credit rating agencies.
Analysts say the success of the Eurobond will hinge on the credibility of Nigeria’s fiscal reforms, the stability of the naira under the new FX framework, and investor confidence in the Central Bank’s monetary policy direction.
While the Eurobond could provide short-term relief to public finances, experts caution that debt sustainability remains a pressing concern.
Nigeria’s ability to manage interest payments, grow non-oil revenues, and maintain exchange rate stability will determine the long-term impact of the plan.
If executed transparently and priced competitively, the issuance could signal Nigeria’s strategic return to the international capital market and boost confidence in its medium-term economic recovery
Ogochukwu Onwaeze
