Tinubu Set to Repay Nigeria’s $500 Million Eurobond Debt in July
- Nigeria’s new President and his government are set to repay a $500 million Eurobond debt this July
- The country obtained the Eurobond five years ago at a rate of 6.375 per annum
- The debt repayment will be Tinubu’s first debt repayment as Nigeria’s debt profile hit N82 trillion following the naira’s devaluation
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President Bola Tinubu’s government will embark on its first debt-servicing this July to redeem a $500 million Eurobond as Nigeria continues to battle economic challenges.
According to data from the Debt Management Office (DMO), a $500 million Eurobond loan is due for repayment this month in line with its conditions.
Source: Getty Images
Nigeria never defaulted on loans in the past
The Nigerian government obtained the loan five years ago at a coupon rate of 6.375% per annum.
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According to reports, Nigeria may have paid the bond or scheduled it for repayment in July 2023.
Eurobonds are usually paid from Nigeria’s external reserves or through special funds established for external bond repayments.
The external reserves have depleted by about $3 billion this year as crude oil sales dive. The need for foreign portfolio investors has also impacted the flow of cash.
Analysts say Nigeria can repay its debts despite the depletion of the country’s external reserves.
In 2018, 2021, and 2022, Nigeria repaid over $800 million in Eurobonds.
Africa’s biggest economy is yet to default on its debt obligations as countries like Ghana have reneged and renegotiated their loan conditions.
Nigeria’s debt stock hits N82 trillion amid CBN's naira devaluation
Legit.ng reported that Nigeria’s public debt has risen to N82 trillion from N77 trillion before the Central Bank of Nigeria (CBN) exchange rate unification, announced on Wednesday, June 14, 2023.
According to a press release by the CBN, all exchange rate windows are collapsed into the Importers and Exporters (I&E) window, showing a merger of the multiple exchange rates.
The unification has seen the naira fall to N664 per dollar and has attracted severe consequences for the nation’s economy, including a spike in public debt.
Source: Legit.ng
