The Analyst

The oversubscription and the very attractive yield of the FG 3rd Eurobond is a very exciting development. This will lower the country's risk profile and help corporate entities in Nigeria to attract foreign capital at good yields. It may also suggest that the economic recession is locally overrated.

However, I will say that the structure of the debt program and it's implications may have help to improve its attractiveness and lower the risk profile.

Firstly, the size of the offer is small. So that when compared to our foreign reserve and foreign earning capacity, the risk of default is considerably low. It could be a different risk profile if the size was $5bn or $10bn.

Secondly, the tenor is comfortably low. A fifteen year term indicates that whatever the country is going through now, it is expected to have been resolved before the repayment of the loan.

Another important thing is that the loan is tier to capital expenditure in the budget, that is social/economic investment which could in turn generate economic activities and attract tax revenue for the repayment of the loan. In other words, the application of the loan and the response from investors justifies the argument that debts are not a bad idea for public investment purposes.

In all, we must thank the Government team led by the Minister of Finance and congratulate them for a job well done.

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