Nigeria is obliged to redeem a $500 million Eurobond this month following the repayment timeline despite the current fiscal and economic headwinds the Nigerian government is contending with now.
Available data on the foreign debt instrument repayment terms sourced from the Debt Management Office (DMO) indicate that the $500 million Eurobond loan is due for repayment this month.
The bond was offered for subscription by the Federal Government about five years ago at a coupon rate of 6.375% per annum would be paid from the country’s external reserves or via a special fund designated for external bond repayments.
Even when Nigeria’ s external reserves have been decreasing over the past months as crude oil earnings and foreign portfolio investments continue to shrink, the country’s ability to redeem its due debt has never been doubted by foreign investors in its debt instruments.
For instance, Nigeria has never defaulted in redeeming its Eurobond loans as had been witnessed in f 2018 and 2021 and 2022 repayments. Also, last year Nigeria repaid $300 million and in 2021 it repaid $500 million.
With the non-default track record, Nigeria has a strong reputation as a credible borrower that can also attract more foreign investments at lower interest rates to fund key infrastructure and other critical projects that are key to diversifying the economy and position it on the path of sustainable growth.
According to the DMO, the next Eurobond payment by the country is due in November 2025 and will require a repayment of about $1.1 billion and by 2027 a $1.5 billion loan will fall due for repayment.
It would be recalled that Nigeria’s total public debt was estimated by analysts to have surged to N82 trillion following the recent Central Bank of Nigeria’s (CBN’s) FX policy on unification of the national currency. Before then, the nation’s total debt stock stood at N73 trillion.
Currently, Nigeria’s total Eurobond obligation is estimated at about $10.7 billion and with different maturity dates while the Naira-denominated debt is about N53 trillion, with the CBN’s Ways and Means loan accounting for about half of the debt stock.
