Eurobond: Massive Boost For Naira as Experts Predict Nigeria’s Reserves to Hit $45bn December
- Nigeria’s recent success at the international bonds market has attracted applause from experts
- A recent report has predicted that, due to smashing success, Nigeria’s reserves are poised to reach record high by December 2025
- The report also predicted that the due to the robust reserves, the local currency will experience appreciable improvement
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s foreign exchange reserves are expected to climb to $45 billion by December 2025, following the country’s successful $2.3 billion Eurobond issuance, according to investment firm CardinalStone.
In its latest Macroeconomic Update, the firm noted that the Eurobond recorded an impressive 5.5x oversubscription, underscoring a strong return of investor confidence in Nigeria’s macroeconomic fundamentals.
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“The Federal Government of Nigeria returned to the international debt market with a $2.3bn Eurobond offer,” CardinalStone stated. “Investors’ appetite was strong, with total bids exceeding $12.7bn, translating to a 5.5x bid-to-offer ratio.”
The report said the 8.62% and 9.13% coupons on the instruments were set amid positive investor sentiment, supported by recent credit rating upgrades from major global agencies.
Reserves to hit $45bn as debt outlook remains stable
CardinalStone projected that the Eurobond inflows would strengthen Nigeria’s external reserves and stabilize the foreign exchange market.
“This development bodes well for FX dynamics, particularly in supporting reserve accretion and naira appreciation,” it said.
According to a Punch report, the firm forecasted that Nigeria’s FX reserves would reach $45 billion by the end of 2025, adding that the new borrowing would not alter the country’s debt outlook, as it had been factored into previous projections.
A portion of the proceeds, it noted, would be used to refinance $1.1 billion maturing Eurobonds due in November 2025 and to bridge fiscal shortfalls. By year-end, CardinalStone expects Nigeria’s public debt to rise to ₦166.7 trillion, representing 42.2% of GDP.
Experts hail success, warn on FX risks
In a separate analysis, Comercio Partners described the successful issuance as a “positive signal” for Nigeria’s fiscal stability, though it warned of potential risks if exchange rate volatility returns.
“On one hand, the inflow boosts external reserves, provides fiscal breathing space, and enhances the government’s capacity to meet short-term obligations,” the firm stated.
“On the other hand, it raises exposure to foreign exchange risk and increases hard currency interest burdens. A renewed bout of FX volatility could undermine investor sentiment and amplify debt-servicing costs.”
Nigeria’s debt still sustainable but fiscal pressures persist
Data from the Debt Management Office (DMO) showed that as of June 30, 2025, Nigeria’s total public debt stood at ₦152.4 trillion ($99.66 billion), split between $46.98 billion external and ₦52.67 billion domestic debt.
The DMO confirmed that Eurobond proceeds will support the 2025 federal budget and refinance maturing obligations, including the $1.118 billion Eurobond due in November 2025.
While Nigeria’s debt-to-GDP ratio remains below the 40% sustainability threshold, analysts cautioned that the debt-service-to-revenue ratio, which exceeds 40%, continues to limit fiscal flexibility and heighten exposure to external shocks.
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Global banks back Nigeria’s return to debt market
The Eurobond transaction was managed by Citi, Goldman Sachs International, J.P. Morgan, and Standard Chartered Bank, with Chapel Hill Denham serving as the sole Nigerian bookrunner.
The issuance followed National Assembly approval of President Bola Tinubu’s request to raise $2.35 billion in foreign loans and a $500 million sovereign Sukuk to fund the 2025 budget deficit and refinance existing debt.
Naira rebounds as Nigeria’s Eurobond sale smashes records
Legit.ng previously reported that the naira demonstrated renewed resilience on Thursday, November 6, 2025, appreciating against the US dollar in both official and parallel markets amid easing demand pressures and stronger foreign reserves.
Data released by the Central Bank of Nigeria (CBN) showed that the local currency climbed to ₦1,436 per dollar at the official window, strengthening from ₦1,446 per dollar recorded the previous day.
The naira also hit an intraday high of ₦1,441 per dollar, with a low of ₦1,434, reflecting improved liquidity and reduced speculative pressure.
Source: Legit.ng
