The Federal Government of Nigeria says it has redeemed $300million Diaspora Bond.
The Bond was issued on June 27, 2017, for a tenor of five (5) years in the International Capital Market, matured on June 27, 2022.
The government says it used part of the proceeds to finance the deficit in the 2017 Appropriation Act. The government considers its action a demonstration of “its commitment to honoring its debt obligations as at when due”
Moreover, the government said it issued the bond as a way of given Nigerians living abroad the opportunity to invest in their own country.
Explainer
- A diaspora bond is a government debt security with investors drawn from the country’s nationals living abroad, their descendants, or those with another connection to the nation
- The bond benefits government by allowing it diversify its investor base while borrowing at below-market rates at the international capital market
- If properly managed, diaspora bonds could generate tens of billions of dollars in annual investment, which could be used in financing infrastructure, defense, social, and other projects that may not be enticing to risk-averse international investors.
- Remittances by Nigerians in Diaspora serves as an alternative government revenue source
