Afreximbank signs N300bn domestic bonds programme

Africa Export Import Bank's recent establishment of a bond program for 300 billion naira has ignited discussions around the future of funding for projects in Nigeria. Under this program, Africa will issue bonds tailored to various projects until the 300 billion naira limit is fully utilized. This move comes at a significant juncture when Africa is embarking on its first-ever domestic bond offering in Nigeria, amidst a time of critical currency fluctuations. The decision to opt for a domestic bond offering instead of borrowing in dollars not only mitigates foreign exchange risks but also demonstrates a strategic shift towards long-term, local currency financing. Kobby Bensti-Enchill, Executive Director and Head of Debt Capital Markets for West Africa at Stanbic IBTC Capital, highlighted the importance of this initiative, especially in the context of managing foreign exchange risk and boosting confidence in the Nigerian capital markets. The rise of such domestic bonds by development finance institutions signals a transformative trend in funding mechanisms and sets the stage for a new era of capital market development in Nigeria and beyond. This progressive move by Afreximbank serves as a blueprint for future interventions by DFIs across Africa, indicating a growing recognition of the benefits and opportunities presented by investment in local markets. The deepening and liquidity of the Nigerian bond market, coupled with the increasing interest from issuers seeking long-term capital, bodes well for the country's economic growth and financial stability. As institutions like Afreximbank lead the way in embracing domestic bond programs, the financial landscape in Nigeria is set to witness a significant transformation, paving the way for sustainable and resilient funding mechanisms for a range of projects and initiatives.