The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has stated that the nature of the oversubscription of the $2bn Eurobond confirms the coupon offered was beyond market offers.

NACCIMA's president, Mr. Dele Oye, shared this in a report tagged, ‘Options for Economic Reform and Consequences for The Medium-Term Expenditure Framework for 2025-2027, NACCIMA New Year message to members and Nigerians'.

Oye, while congratulating the financial team for a great outing, said that the offer was received with mixed feelings.

“The successful Eurobond offer was received with mixed feelings.

"We congratulate the financial team on a successful outing. However, the nature of over-subscription confirms the coupon offered was beyond market offers,” Oye said.

Recall that in December, Nigeria returned to the international capital market for the first time in over two years, issuing Eurobonds to bridge its growing fiscal deficit.

Nigeria issued a dual-tranche Eurobond offering under its Global Medium Term Note Programme to finance the country’s 2024 fiscal deficit. The issuance was oversubscribed in excess of $9bn; however, the federal government eventually took just $2.2bn across both bonds. The FG sold $700m worth of the 6.5-year Eurobond maturing in 2031 at a coupon rate of 9.625 per cent and $1.5bn of the 10-year tenure at 10.375 per cent.

This marks Nigeria’s first Eurobond issuance since March 2022, signalling a renewed effort to address the country’s fiscal challenges.

Oye further advised that there is a need to consider a hybrid offer that allows a Dutch auction that mops up the best offers at each coupon level.

“Perhaps we need to consider a hybrid offer that allows a Dutch auction that mops up the best offers at each coupon level.

"The successful bidders made instant profits overnight on the offer.

“Because, while the improved liquidity gives the government access to international financial markets, they do not guarantee long-term economic stability. Relying heavily on foreign borrowing may expose the country to external shocks and currency fluctuations,” he advised.

Oye mentioned that the introduction of public sector expenditure guidance at all government levels for the purchase of locally produced goods and services will reduce pressure on foreign exchange demand by government agencies and their contractors.

He stressed that investment in public infrastructure should result in the utilisation of more locally sourced inputs, higher investment in local infrastructure, and improved local productive capacity.

The NACCIMA president mentioned that Nigeria needs a coordinated approach to delivering the latest technologies and digital infrastructure to facilitate the delivery of social services, public health, education, and digital infrastructure.