The IFC plans to issue as much as US$1 billion in Naira bonds, and indicates future plans for its further issuance of local currency bonds including one for Ghana In the months following major dollar Eurobond issuances from Ghana (at a higher interest rate cost or coupon) and Nigeria (at a lower coupon), the World Bank's International Finance Corporation (IFC) subsidiary is set to issue a series of local currency bonds to assist local infrastructure projects and small and medium sized businesses with little access to funding - having earlier this year (February) issued a relatively small (equivalent to US$75 million) Naira bond at around 10% yield for such purposes.
For example the IFC plans to issue up to the equivalent of US$1 billion of Naira bonds to assist, among other things, Nigeria's power industry which, relative to Ghana for all its energy problems, continues to be in disarray with an significant adverse impact on what should be a Nigerian locomotive for growth in West Africa…
It should be noted that, in a continent of legion investment opportunities, Nigeria accounts for almost one third of the IFC's 2013 investment commitments of around US$5.3 billion. This is a several-fold increase (for Nigeria and for Africa) over the past decade or so and is a trend also reflected in growing intra-African investment and remittances to the continent. While any planned Ghana issuance would be much smaller the IFC is indeed contemplating a Ghana local currency bond among others.
© 2013 Menas Associates
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