ByStanley Opara

Tuesday, 25 Jan 2011

Following the success of the heavily oversubscribed $500m Eurobond issued by the Federal Government to investors in the international market on Friday, financial experts in the country have called for the sustenance of the confidence the world has in Nigeria.

The experts, who spoke to our correspondent on Monday in separate interviews, said the success recorded in the exercise was a function of the strategic role the Nigerian economy plays in global finance and the huge confidence and goodwill the economy had enjoyed in recent times.

According to the executive Secretary/Chief Executive Officer, Finance Houses Association of Nigeria, Mr. Benn Nwokike, the international economy still saw the huge potential of the Nigerian economy and was ready to leverage on the opportunities it presented.

He said the level of stability seen in the economy, even during the global economic crisis, sent strong signals to the international business community, adding that the issuance of the Eurobond, however, was an opportunity most investors had waited for.

He, therefore, attributed the level of confidence seen to the recent activities of the Central Bank of Nigeria and other stakeholders targeted at stabilising the nation’s financial sector.

In the same vein, the immediate past chairman, Institute of Chartered Accountants of Nigeria, Lagos Mainland District Society, Chief David Alaribe, reiterated that the level of confidence the international business community had in the nation’s economy was high.

Alaribe, who is also the chairman, DCSA Consults, said, “The Nigerian economy is healthy. The country is like a virgin land with so many prospects. The only thing we still needed to get right is our leadership.”

The $500m debut Eurobond, with a seven per cent yield was heavily oversubscribed as appetite for high-yielding assets outweighed concern about the country’s depleted oil savings.

Investors from 18 countries spanning Europe, the United States, Asia and Africa took up the offer, which was 2.5 times oversubscribed, according to the Finance Minister, Mr. Olusegun Aganga.

This transaction clearly puts Nigeria on the global map. We now have a transparent and internationally observable benchmark against which international investors can accurately price risk,” Aganga said, forecasting a rise in foreign investment into the country’s economy.

The successful issue, months ahead of elections, could reassure others on the continent of the strength of demand for African debt, convincing them to press ahead with similar but delayed plans, a report from Reuters upheld.

Source: Punch