Nigeria’s government has said that the $1billion Euro bond would be channeled towards supporting infrastructural project.
According to the Coordinating Minister for the Economy (CME), Mrs. Ngozi Okonjo-Iweala, on Wednesday in Abuja, it is contrary to insinuations in some quarters that the bond is meant to support the budget.
Media reports have quoted the CME as saying that Nigeria’s economy is on a downward trend.
Mrs. Okonjo-Iweala explained that the bond would be channeled into the completion of Power projects in the areas of completing gas station in the southern part of Nigeria which according to her, was started with $400 million as well as transmission processes which is still under government control.
"We will channel some of the money to the construction of some other projects like the Second Niger Bridge, agricultural infrastructure and Bulk trade which was created to support the power market to ensure that lapses do not exist in the system," she highlighted.
Giving further analysis, the Minister explained that the $1 billion Bond was acquired at $500 million for 5 years Bond, $1,730million subscription at a coupon of 5.125% per annum and $500million 10 years Bond, $2,2225.50million subscription at a coupon of 6.375%, stressing that the issuance came at the heel of highly volatile international financial markets which saw a sharp drop in prices of equities and bond.
She said, "The demand for Nigeria's Sovereign debt securities was evident in the international capital market as top international investors considered Nigeria to be one of the top performers among emerging markets and apparently, one of a few African Countries with the appropriate credit story for investors.”
The Minister said that due to the high demand for Nigeria Bond, over 200 foreign investors from US, UK and Asia could not subscribe to the Bond as only top, quality and highly rated companies were able to get the bond shares.
For his part, the Director General, Debt Management Office (DMO), Mr Abraham Nwankwo, noted that the international investors have exceeded the expectation of analyst in their response to the recently floated $1 billion Nigerian bond, adding that the response has been oversubscribed by four times which he explained is anchored on a strong perception of the fundamentals of the Nigerian economy.
Meanwhile, the Minister has debunked media reports credited to her that the economy will go under by September if the disagreement between the legislators and the executive over the 2013 budget is not resolved.
“Actually the headline that was put in the papers was wrong. There is no place where I said the economy will collapse. The debate is centred round the sensational headline put up by the newspaper which is incorrect.
What I said is actually on tape. What I said was actually on the payment of salaries.
Actually, our economy is strong; we just need to sort out some of these issues. Yes, we have to sort out the problem and it will be sorted. The economy is moving, budgets are being implemented.
She appealed to the media to desist from twisting words out of context in order to heat up the economy.
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