Nigeria’s Economic Breakthrough: AFC Leads Groundbreaking $900 Million Domestic Dollar Bond
By Innocent Eneta
In a historic move for Nigeria’s capital markets, the Africa Finance Corporation (AFC) has successfully coordinated the country’s inaugural domestic dollar bond, raising over US$900 million. This landmark issuance marks a significant achievement in the nation’s financial landscape and demonstrates growing investor confidence in Nigeria’s economic stability.
The bond, issued by the Federal Government of Nigeria (FGN), closed with an overwhelming 180% oversubscription. This exceptional demand reflects both the strong domestic investor confidence and the strategic leadership of the AFC, the continent’s leading infrastructure solutions provider.
“This inaugural domestic US dollar bond issuance is a significant achievement for Nigeria and marks a new chapter in the development of the country’s capital markets,” said Banji Fehintola, Executive Director and Head of Financial Services at AFC. He added, “We are honoured to have played a leading role in this landmark transaction as the Global Coordinator, which aligns with AFC’s mission to develop domestic capital markets in Africa.”
The bond, which carries a five-year tenor and an annual coupon rate of 9.75%, is the first to be issued under the FGN’s Domestic US Dollar Bond Programme. It attracted a diverse range of investors, including Nigerians, residents in Nigeria, Nigerians in the diaspora, and institutional investors. The bond will be available for trading on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited, further deepening Nigeria’s capital markets.
Proceeds from the bond will be invested in critical sectors of the Nigerian economy, focusing on key development projects approved by the President and recommended by the Minister of Finance, pending appropriation by the National Assembly. This strategic allocation aligns with the government’s goals of promoting financial inclusion and expanding funding sources to support national growth.
AFC’s leadership in coordinating the bond issuance underscores its role as a driving force behind the financial evolution of African markets. The corporation’s success builds on its previous achievements, including the issuance of a US$1.16 billion global syndicated loan earlier this year. AFC’s innovative financial strategies continue to draw attention, earning accolades such as “The Most Innovative Bond” at the EMEA Finance Achievement Awards for its groundbreaking Samurai Bond Guarantee to Egypt.
Banji Fehintola emphasized AFC’s commitment to fostering capital market growth across the continent: “This successful issuance not only showcases Nigeria’s economic potential but also reinforces the benefits of African nations looking inward to tap the deep pool of domestic capital on the continent and taking the lead in financing their own development.”
With key players such as United Capital Plc, Meristem Capital Limited, and Stanbic IBTC Capital Limited acting as issuing houses, the bond issuance is set to play a pivotal role in driving Nigeria’s financial independence and setting a precedent for future domestic dollar bonds across the continent.
As the first of its kind in Nigeria, this bond issuance signifies a bold step forward for the nation, reaffirming its position as a leader in Africa’s evolving financial markets.
