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Nigeria raises $4bn through Eurobonds

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Nigeria has raised $4 billion through Eurobonds, which was a reflection of investors’ confidence in the economy.

The amount was raised after an intensive two days of virtual meetings with investors across the globe.

In a statement issued last night, the Debt Management Office (DMO) explained that the Order Book peaked at $12.2 billion, which enabled the Federal Government of Nigeria (FGN) to raise $1 billion more than the $3 billion it initially announced.

It said: “This exceptional performance has been described as, “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.

According to the DMO, bids for the Eurobonds were received from investors in Europe and America, as well as Asia. There was also good participation by local investors.
According to the statement, the size of the Order Book and the quality of investors demonstrates confidence in Nigeria.

The Eurobonds were issued in three tranches, details, namely seven years–,$1.25 billion at 6.125 per cent per annum; 12 years -$1.5 billion at 7.375 per cent per annum as well as 30 years -$1.25 billion at 8.25 per annum

The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 –2023, the DMO said.

It stressed that since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of $4 billion through Eurobonds
provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act.

Nigeria returned to the International Capital Market (ICM) three years after its last outing in 2018, when it floated a $2.5 billion aggregate Eurobonds under its Global Medium Term Note Programme.

The DMO had stated that in addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of the Eurobonds would benefits the country in many other strategic ways.

According to the DMO, it would also bring about an inflow of foreign exchange, leading to an increase in external reserves to help support the naira exchange rate as well as Nigeria’s sovereign rating.

It further explained that when Nigeria raised funds externally through Eurobonds, it freed up space in the domestic market for private sector and sub-national borrowers.

The debt management body stated, “In effect, it helps the sovereign not to crowd out other borrowers in the domestic market. The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector, notably banks, to issue Eurobonds to raise capital in the ICM.”

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MTN Nigeria compensates subscribers for network downtime

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MTN Nigeria Communications Plc has announced compensation for its subscribers to make up for the network disruptions experienced last Saturday.

On Saturday, 9th October 2021, MTN Nigeria users witnessed hours of network disruption caused by an outage that left customers without a connection.

Olutokun Toriola, Chief Executive Officer, MTN Nigeria, apologised again to customers for the inconvenience, stating that new measures were being implemented to mitigate a repeat of such an event.

“On behalf of the entire MTN team, I want to start with a heartfelt apology. We are truly sorry for the disruption this caused for so many in our MTN family. We know that millions of people rely on us to stay connected to their loved ones, to manage their businesses, to coordinate their lives. We take that responsibility, and privilege, very seriously. That’s why we are putting new measures in place to make sure we never experience anything like last Saturday again,” said Toriola.

On the cause of the outage, the CEO stated that it was due to an error that shifted all 4G customers onto the 3G band and impacted the whole network, adding that the technical teams were able to rectify the problem.

“Our technical teams have traced the cause of the problem to an error that shifted all our 4G customers onto the 3G band. This overloaded the 3G band, causing a domino effect that impacted the whole network.

“Our engineers were able to resolve the problem. I know that recently other technology companies have suffered outages. I want to reassure you that last Saturday’s event is in no way connected to those. This wasn’t sabotaged, it was a regrettable error.’’

Beyond extending time-bound subscriptions for its customers and as a way to further compensate its customers, the telecom giant said that customers on the MTN network have received a refund for the data and airtime that they used between 12noon and 7pm on Saturday, 16th October 2021.

“While we can’t give you back the time you lost last Saturday, we can give you back what you spent yesterday. Every customer on the MTN network has received a refund for the data and airtime that they used between 10 am and 3 pm yesterday. We hope it shows how much we value our customers.

“You truly are our most important focus. We all have challenges, each and every one of us – young or old, personally or professionally. What matters is how we respond. With you by our side, we will continue to improve and grow. Thank you for all your support. Thank you for walking with us over the last 20 years. We look forward to the next 20 and more with you,” Toriola stated.

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IMF cautions as crypto market value surpasses N820trn

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Financial experts with the International Monetary Fund (IMF) have called for caution and regulation as the total market value of all the crypto assets surpassed $2 trillion (N820 trillion) – a 10-fold increase since early 2020.

The experts, Dimitris Drakopoulos, Fabio Natalucci and Evan Papageorgiou, in an article on the IMF’s blog, warned that many of these entities lacked strong operational, governance and risk practices.

They noted that crypto assets offered a new world of opportunities but warned that along with the opportunities come challenges and risks.

The trio explained that crypto exchanges, for instance, have faced significant disruptions during periods of market turbulence, adding that there are also several high-profile cases of hacking-related thefts of customer funds.

The financial experts argued that consumer protection risks remain substantial given limited or inadequate disclosure and oversight.

“For example, more than 16,000 tokens have been listed in various exchanges and around 9,000 exist today, while the rest have disappeared in some form.

The extent of the adoption of crypto assets is difficult to measure, however, surveys and other measures suggest that emerging markets and developing economies like Nigeria may be leading the way. 

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US may sanction IOCs in Nigeria, others for Hydrocarbon production

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International Oil Companies (IOCs), which insist on ramping up production of fossil fuels in Africa may face the risk of regulatory action from the United States.

This was disclosed by the country’s Deputy Special Presidential Envoy for Climate, Jonathan Pershing.

If the US makes good its threat, it will be a major blow to Nigeria, Angola, Congo and other oil-producing countries in Africa, which have intensified efforts to attract foreign investors to fund major hydrocarbons projects on the continent.

In August, President Muhammadu Buhari finally signed the Petroleum Industry Act (PIA) to spur competition in the sector as well as attract foreign investments.

But with the position of the US, many of the expected funding for Nigeria’s fossil fuels may be stranded since oil companies would be circumspect about putting their dollars in the upcoming projects.

Western fossil fuel companies planning to develop new projects in Africa would then need to consider the significant risk of regulatory action vis-à-vis the returns on investment in Africa.
Speaking from South Africa, the US envoy urged western investors to consider whether fossil fuels were a good commercial opportunity anymore in Africa or anywhere else.

“There’s a risk of regulatory … and financial activities, and I believe that’s getting more and more explicit. If you are a company looking to invest in oil and gas, you have to ask yourself…‘am I going to be left with a stranded asset?’ I would not bet very strongly on a fossil fuel future,” he said.

Pershing, who was speaking at a virtual media briefing, after being asked about the current rush by western oil and gas companies to develop deposits in Africa, noted that even China had committed to stop building overseas coal plants.

Africa accounts for just 3.8 per cent of greenhouse gas emissions, according to the non-profit Carbon Disclosure Project, but Pershing noted it was the fastest-growing continent.
It could, he said: “leapfrog” older carbon-based technologies and embrace renewables, just as it skipped wired telecoms in many places and went straight for wireless.
“Africa doesn’t need to move in the direction of the West’s high-carbon intensity. It can move directly beyond that,” he said.

His comments came despite the United States itself being a major producer and exporter of oil and gas, with recent growth driven by output from shale fields, a Reuters report said.
The US envoy is visiting several African countries as part of efforts to raise global climate ambition ahead of the United Nations COP26 Climate Summit in Glasgow, Scotland next month.

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