Patience Oniha, the director-general of the Nigeria Debt Management Office (DMO), revealed this development at the Nigeria Investor Forum held on the sidelines of the International Monetary Fund and World Bank Spring Meetings in Washington DC.

The decision to rejoin the JPMorgan Index is part of Nigeria’s efforts to restore trust with international investors, while demonstrating its commitment to economic reforms and transparency.

Oniha emphasized that Nigeria now meets the eligibility criteria for inclusion, stating, “With the recent reforms in the foreign exchange market, we believe Nigeria meets the criteria to rejoin the index.”

Oniha, along with Olayemi Cardoso, the Central Bank of Nigeria Governor, highlighted the naira’s stability and rising investor confidence.

This optimism is supported by Fitch’s recent upgrade of Nigeria’s long-term foreign-currency rating to ‘B’ from ‘B-‘, signalling renewed investor confidence.

Nigeria was initially included in the JPMorgan Index in 2012. However, it was placed on a negative watchlist before being officially removed in 2015 due to concerns over transparency and liquidity issues.

The JPMorgan GBI-EM is a key benchmark used by investors to track the performance of local currency-denominated government bonds in emerging markets.

It includes only countries that are accessible to most international investors, and inclusion in the GBI-EM is crucial for emerging markets, as it boosts foreign investment and enhances access to capital markets.

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Speaking about the outcome of the groundbreaking bond issuance on Tuesday,  Wale Edun pointed out that the oversubscription demonstrates investors’ confidence in Nigeria’s economic stability and potential for growth.

“The issuance of this inaugural domestic FGN US Dollar Bond highlights the continued faith investors have in Nigeria’s economy,” Edun said.

The bond attracted a wide range of investors, including Nigerians both locally and abroad, as well as institutional investors. The proceeds from the bond will be allocated to critical economic sectors, as approved by President Bola Ahmed Tinubu.

The $500 million domestic FGN US Dollar Bond, with a five-year maturity and a 9.75% coupon, is the first tranche of a $2bn bond programme registered with the Securities and Exchange Commission. The structure of the bond allows the government to absorb oversubscriptions up to the full $2bn programme limit.

The Director-General of the Debt Management Office, Patience Oniha, described the bond’s success as a pivotal moment for Nigeria’s economic development. She noted that the $900m raised from diverse investors underscores the growing sophistication of Nigeria’s domestic fixed-income market.

FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government. The FGN has an obligation to pay the bondholder the principal and agreed interest as and when due.

When you buy FGN Bonds, you are lending to the FGN for a specified period of time. The FGN Bonds are considered as the safest of all investments in domestic debt market because it is backed by the ‘full faith and credit’ of the Federal Government, and as such it is classified as a risk free debt instrument. They have no default risk, meaning that it is absolutely certain your interest and principal will be paid as and when due. The interest income earned from the securities are tax exempt.

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