Nigeria plans to raise $2.8 billion through fresh loans and the debut of global sukuk

Nigerian President Bola Tinubu asked parliament on Tuesday to approve new loans worth $2.3 billion and the issuing of a $500 million sovereign sukuk, which is the country’s first bond on the foreign debt markets.

Wale Edun, who is Nigeria’s Finance Minister and Coordinating Minister for the Economy, said at an economic summit in Abuja on Monday that the government was focused on green bonds, sukuk, and diaspora bonds because they are cheaper than Eurobonds.

Nigeria could issue up to $2.3 billion in foreign bonds before the end of the year, according to the head of the country’s debt office, who told Reuters last month. This would depend on how the market is doing.

Africa’s most populous country sold its first foreign bonds in almost three years in December of last year, but it hasn’t used the world’s capital markets yet this year.

Through the changes Tinubu pushed through, Nigeria has improved its finances and gotten good reviews from rating agencies. Investors are hoping that the government’s attempts to reform will pay off with lower yields on future debt issues.

According to Tinubu’s letter, the new money would be used to help pay for the budget deficit and renew Eurobonds that are set to mature in November. Furthermore, it was stated that loans could be gathered through the Eurobond market, loan syndications, bridge financing from bookrunners, or directly from foreign banks.

In an effort to repeat the success of its domestic sukuk program in foreign markets, the president said the government would issue the sukuk with or without credit enhancements from the Islamic Corporation.