In a bid to fund the humongous power and gas sector projects lined up by President Goodluck Jonathan administration, the Federal Government has indicated its resolve to issue a Eurobond worth up to $1 billion next year. The measure is aimed at taking advantage of Nigeria’s likely inclusion in a JP Morgan emerging market index.
A Eurobond is an international bond that is denominated in a currency not native to the country where it is issued.
The Finance Minister and Coordinating Minister of Economy, Mrs. Okonjo-Iweala, said her long-term target was to scrap the Excess Crude Account (ECA) and replace it with a planned sovereign wealth fund.
JP Morgan said on August 15 that Nigeria is likely to be included in JP Morgan's Government Bond Index - Emerging Markets (GBI-EM) from October , which the minister said would open up fresh opportunities for issuance. She pointed to Nigeria's improved credit ratings in the past year, with Fitch upgrading the country to BB- and Standard & Poors upgrading its rating outlook to positive from stable.
Nigeria has over the years earned a reputation for reckless fiscal spending and chronic corruption, ills which Okonjo-Iweala was brought back into the country from her former World Bank job to cure.