Nigeria: Country seeks debt restructuring from IMF, World Bank – FinMin Ahmed
Metodi Tzanov
Helping finance professionals understand what is going on in Emerging and Frontier Markets
The federal government is in talks with the IMF and the World Bank to restructure Nigeria's debts, FinMin Ahmed said during the IMF/WB annual meeting in Washington, according to the local newspaper ThisDay. In a separate interview with Bloomberg, Ahmed is quoted saying Nigeria has "appointed consultants to advise the government on restructuring and negotiating to stretch out the repayments to longer periods". Nigeria will be looking for ways to extend the maturity of its debts as the country struggles with?severe revenue challenges amidst rising debt service costs.
FinMin Ahmed added Nigeria is considering tapping the IMF's newly created Food Shock Window, which allows member-countries to access emergency financing instruments. Ahmed said the government has not yet taken decision, because it doesn't want to be drawn into an IMF program, although she noted the devastating impact of the floods on food supply.
FinMin Ahmed told Bloomberg the federal government plans to refinance domestic debt obligations that are due this year and convert the Ways and Means financing from the World Bank into long-term bonds. The Ways and Means financing has ballooned to NGN 20tn (USD 45bn) as of end-August. Ahmed added the federal government is considering tapping the Eurobond market as well, should interest rates decrease and move closer to March's levels. However, given Nigeria's revenue challenges, the election uncertainty, and FX challenges, we don't believe market conditions will be appropriate for a Nigerian sovereign Eurobond.