The Federal Government of Nigeria is set to issue a $2.3 billion Eurobond before the end of 2025, a move analysts say could bolster the country’s foreign exchange liquidity and support investor confidence, while also providing short-term fiscal relief amid concerns about rising external debt.
The naira has appreciated 4.5 percent this year, trading at ₦1,475.35 to the dollar as of October 17, up from ₦1,541.36 at the start of the year, according to the Central Bank of Nigeria. External reserves have also risen by $1.8 billion, reaching $42.68 billion, reflecting the central bank’s ongoing efforts to stabilize the foreign exchange market and attract portfolio inflows.
At the recently concluded World Bank and IMF Annual Meetings, Mohammed Sani Abdullahi, deputy governor of the CBN in charge of economic policy, confirmed the plan to issue the Eurobond. Part of the proceeds will refinance a $1.18 billion Eurobond maturing in November, while the remainder is expected to strengthen reserves and maintain investor confidence. “We plan to issue Eurobonds of up to $2.3 billion, which will also help refinance the $1.18 billion Eurobond maturing in November,” Abdullahi said. “We will approach the international capital market later this year, depending on market conditions and the guidance of our transaction advisers.”
Experts say the issuance is mainly aimed at managing maturing obligations rather than increasing the country’s overall debt. Ayokunle Olubunmi, head of financial institutions ratings at Agusto & Co., said it would help moderate pressure on reserves and stabilize the exchange rate in the short term. Adebowale Funmi, head of research at Parthian Securities, noted that while the inflow provides temporary relief to fiscal and foreign exchange pressures, it also adds to Nigeria’s external debt and heightens debt service obligations.
In the short term, the Eurobond proceeds are expected to support the naira, strengthen reserves, and reduce the need for heavy domestic borrowing, which could help ease yields in the local bond market. The funds will also help finance part of the 2025 budget deficit and refinance maturing external debt obligations, reducing immediate repayment pressure. However, Funmi warned that continued reliance on Eurobonds underscores Nigeria’s vulnerability to external shocks and highlights the urgent need for stronger domestic revenue mobilization and fiscal reforms to ensure long-term debt sustainability.
Government officials stress that the success of the Eurobond issuance will hinge on investor confidence and market conditions. A successful issuance could signal a positive outlook for Nigeria’s economy and attract further portfolio inflows, but analysts caution that without structural fiscal reforms and improved revenue generation, the benefits may be short-lived.
Recent gains in foreign reserves and the relative stability of the naira are positive signals, but sustained improvements will require consistent economic policies and reforms aimed at diversifying revenue sources and strengthening financial governance.
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FG to Raise $2.3 Billion from Eurobond as Naira Gains and Reserves Improve
The Federal Government of Nigeria is set to issue a $2.3 billion Eurobond before the end of 2025, a move analysts say could bolster