The Managing Director, Ecobank Nigeria, Patrick Akinwuntan says the Federal Government’s plan to issue Eurobond in the International Capital Market (ICM) as a step in the right direction.
Akinwuntan, who was assessing the global market in a TV programme monitored in Lagos, noted that Nigeria, with strong economic fundamentals and potential, has the capacity to meet its debt obligations even as the private sector is also making remarkable improvement in power sector, telecoms, and information technology.
In his words; “What is the story of this economy? You look at Nigeria, the fundamentals are strong, coming from the lessons learnt in being a mono product economy which was dependent on oil, we have since embarked on the journey of diversification and we are beginning to show early fruits, Exports are improving, Africa Continental Free Trade Area (AfCFTA) provides the opportunity to expand that even further.
“So, you look at the fundamentals, look at the openness of the economy, the transparency of reporting and look at the opportunities to enhance real growth, output, capacity improvements and stability of policies. All these are factors to look at with a view of participating in the economy like that of Nigeria.”
The Ecobank boss noted that international borrowing will allow Nigeria as a country to access more foreign currencies, deepen external reserve, engenders more confidence in the medium-term planning in the private sector, and provides a benchmark for pricing funding and investment within the local economy as this would ease private sector financing or public sector debt within the country leaving room for the local economy to blossom.
“We have seen, since the arrival of vaccines, the gradual opening of the global economy such that there is much more optimism now in the market because we have learnt that shutting down the economy is not the best way to handle an epidemic and we have seen support from sovereigns ensuring that there is steady growth within the various economies; supply chain has opened and we have seen in sub-Sahara Africa renewed interest in the Eurobond market.”
“In the international debt market; we have seen Benin republic, Ghana, Cote d’ivoire and Kenya all are approaching the market with significant success. Over subscription in each of them ranges from 200% to 300% and an all high in Kenya close to 600% or six times over subscription. This is a positive period for major economies like Nigeria, which is the lead economy in Africa, to take advantage and invite the global community to hear our story, invest in us and get good returns.” Akinwuntan noted.
Citing example with Ecobank’s $300 million Eurobond offer earlier in the year which was over-subscribed by 300 per cent, he advised those approaching international debt market to have clarity of purpose and state assess their strengths and weaknesses. “We are the first banking entity in Africa to do that in 2021 and it comes from our long-term planning in the economy of Africa; we are the pan African bank and when we look at Africa, Nigeria is a major player. Quickly we understood that arising from a scenario of pandemic and all-time lows of 2020 is time to look at the brighter side and we stepped out for the $300m US Eurobond offer which met positive response from investors across the globe within the country.”
We attracted more than 3 times in subscription but we kept to the book of doing $300m because it is based on our plan in participating in positioning Nigeria, as the leading export country in the AFCTCA environment in the continent and giving our unique position as the Pan African bank, it was very clear to us and the market responded positively. Our experience also tells us that, what is critical is to have clarity on your strength, be very frank about your weakness or the areas of concern and how you intend to handle that positively.”