Nigeria to issue diaspora bond in 2012

Nigeria will issue a diaspora bond next year to raise funds for infrastructure and development projects, the head of its Debt Management Office (DMO) said on Thursday.

Africa’s biggest oil producer will also introduce inflation-linked bonds in 2012 in a bid to develop the domestic bond market, Abraham Nwankwo, director-general of the agency, told Reuters in a phone interview.

“Nigeria is most likely to have a diaspora bond in the market in 2012,” he said. “We are working seriously on it.”

He said the DMO had received the backing of finance minister Ngozi Okonjo-Iweala, a keen advocate of tapping the wealth of migrants to finance infrastructure projects in their home countries.

“The finance minister has talked about diaspora bonds,” Nwankwo said. “She has given us instructions to progress on that.”

Nwankwo said the size of the diaspora bond was yet to be determined but stressed that its proceeds would be used for “specific, commercially viable projects”. Its tenor was likely to be five years or longer.

“We are working hard to make sure we structure it in a manner that is consistent with the preferences of the Nigerian diaspora and at the same time satisfies our need to mobilise the resources to fund the provision of critical national infrastructure and development projects,” he said.