Nigeria is looking to issue a debut diaspora bond by March to raise funds from Nigerians abroad, after completing a US$1 billion eurobond sale this month, a finance ministry source told reporters on Wednesday.
Nigeria is in its first recession in 25 years and needs to find money to make up for shortfalls in its budget. Low prices for crude have slashed its oil revenues.
It first announced plans to sell diaspora bonds in 2013 to raise between US$100 billion to US$300 billion, but the federal government at the time could not finish appointing book-runners for the sale before an election that swept the opposition into office.
The federal government plans to borrow up to US$10 billion, with about half of that coming from foreign sources as it seeks to boost overseas loans to plug funding gaps and lower costs.
But so far only the African Development Bank (AfDB) has publicly confirmed a budget support package of US$1 billion.
In December, the Buhari administration appointed Citigroup, Standard Chartered Bank and Stanbic IBTC Bank to manage the $1 billion eurobond sale, which it hopes to begin marketing in January.
Remittances are the second-largest source of foreign exchange receipts in Nigeria, after oil revenues. Citizens living abroad send at least US$10 billion home annually.
Nigeria is the world’s 5th-biggest destination for international remittances after China, India, the Philippines and Mexico, with 5 million Nigerians living abroad sending money back to relatives, according to Western Union.