Nigeria's debt strategy explained

Nigeria's debt management strategy has been in the spotlight recently, with the successful issuance of the country's first diaspora bond. Dr. Abraham Nwankwo, the Director General of Nigeria's Debt Management Office, recently sat down for an interview with CNBC Africa to shed light on the country's debt strategy. The diaspora bond, which was oversubscribed by 130%, was targeted at Nigerians both at home and abroad, giving them a unique opportunity to contribute to the nation's development. Dr. Nwankwo emphasized the importance of this bond in funding Nigeria's economic growth, especially at a time when the government is working towards overcoming constraints that have hindered the country from leveraging its abundant resources. One significant aspect of the diaspora bond is its registration under the United States Securities and Exchange Commission, allowing Nigeria to tap into a new pool of investors, beyond the traditional institutional ones. This move marks a milestone for Nigeria as the first African country to access the retail market in the United States. Dr. Nwankwo highlighted the positive impact of the diaspora bond on Nigeria's existing euro bonds, attributing it to improved policies and operations within the country. He expressed confidence in leaving behind a robust and innovative debt management office as he concludes his tenure of 10 years. Looking ahead, the Debt Management Office is set to issue a 100 billion Naira Sukuk bond, further diversifying the country's debt instruments and offering more options for investors. The forthcoming Sukuk, known as Ijarah Sukuk, aims to promote inclusivity in the capital market and support Nigeria's economic recovery and growth agenda. With preparations nearing completion, the Sukuk issuance is expected to coincide with the Ramadan and Eid celebrations, underscoring Nigeria's commitment to expanding its capital market opportunities for all stakeholders.