It is here – dollar-denominated domestic bond hits Nigeria, and that means you can earn interests on those US dollars if you make them available to the government: “The Federal Government of Nigeria is preparing to issue its first-ever dollar-denominated domestic bond on Monday, aiming to raise $500 million from a mix of local and international investors…Initially, the federal government aims to raise $500 million through the bond issuance. However, according to an auction circular, the government is targeting $1 billion in subscriptions and could potentially upsize the bond program to $2 billion, depending on demand.”
It could hit $5 billion depending on the yield rate. Does anyone here know the yield rate as it is not indicated in the piece?
Left and Right: When a bird leaves the ground and perches on the ant-hill, it is still very much on the ground. Nigeria promised to disconnect the nation from the US dollar, and today, it is issuing US dollar bonds locally. Simply, it does not see value on its currency, and that is why it has to pursue this path LOCALLY.
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
I hope it works because if you annihilate your currency to the point that having piles of it does not help you do great things, it could be extrapolated that recent policies may indeed be pure own goals. But hey, we continue to believe.
Poor Naira will struggle over this.
The government wants to entice us to bring those hidden US dollars which are in special bunkers into the banking system in Nigeria. Possibly, if you have US dollars under your pillow when you see the promise of getting that money back with interest, you will participate in the bond offering. This one is home, and domestic, which means villagers in Ovim, Abia State, can participate.
Are you excited already? Yes, the promise is to lend USD dollars, and be paid back in USD dollars with interest, by the Nigerian government. You have been waiting for that, and the government is going to make it possible soon.
As a village boy, the idea is good on paper, but this policy will destroy Naira further. Yes, he is coming again. Hold on – and chill. My point is simple: if you allow Nigerians to invest in USD to be paid interest in USD, people will sell Naira to look for USD to invest in this bond. In other words, Naira will weaken because this bond will put pressure on the local currency.
The implication is this: as the nation hopes to attract some local USD into the system, there is a risk of messing up Naira further in the process. In other words, the government is bringing this fight home, no more in New York or London, and Naira may not be prepared.
Comment on Feed
Comment: Well, let’s hope it will bring out those funds that have been hidden in overhead tanks and under the ground in Ghana-must-go bags
My Response: Naira will hit N2,000 as most will buy USD to invest. Hidden dollar criminals do not believe in a 3-10% annual yield rate – they get 10,000% overnight. I do not expect them to participate.
Nigerian Government to Issue $500m First Domestic Dollar Bond on Monday
---
Register for Tekedia Mini-MBA (Sept 9 – Dec 7, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.