Nigeria Plans to Refinance Costly Debts, Raise Fresh Funds as Market Conditions Improve – Oyedele
By Aboki Forex —
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, says Nigeria is considering refinancing some of its expensive debt obligations and raising fresh funding to bridge the budget deficit. He spoke in an interview with Bloomberg TV.
Oyedele said the federal government intends to take advantage of favourable market conditions to restructure costly legacy debt and secure additional financing for development projects.
“We think that this timing is good for us to be able to maybe even refinance some of our expensive past debts, but also to raise more funding for our development at this critical time. You don’t know what happens tomorrow. But as of today, market conditions are actually very good,” he said.
The minister’s remarks come amid a rise in crude oil prices following tensions in the Middle East. Higher oil prices have strengthened Nigeria’s external earnings position and improved investor perception of the country’s creditworthiness.
The premium demanded by investors to hold Nigerian dollar-denominated bonds over comparable United States Treasury securities has also declined significantly. This reflects growing confidence in the economy.
Despite improvements in government revenue, Oyedele said Nigeria still faces a budget deficit of about N30 trillion this year. This makes additional financing necessary.
He added that the government is keeping its financing options open, including access to concessional loans from multilateral institutions.
“We’re keeping our options open. We know the size of the deficit, including less-costly concessionary loans,” he said.
According to him, discussions are ongoing with the World Bank and other development finance institutions. Reforms implemented by the Bola Tinubu administration continue to attract investor interest.
The government has undertaken several reforms since May 2023, including the removal of fuel subsidies, tax policy changes, foreign exchange reforms and measures aimed at improving fiscal revenues.
Oyedele noted that while rising oil prices have boosted government earnings, they have also contributed to inflationary pressures globally, making economic management more challenging.