Nigeria is considering refinancing costly existing debt and raising additional financing to support development spending as improving global market conditions and stronger oil prices boost investor confidence, Finance Minister Taiwo Oyedele has said.
Speaking in an interview with Bloomberg TV, Oyedele said the government intends to take advantage of favourable borrowing conditions to restructure legacy debt while also mobilising new funding to cover a substantial budget deficit.
He said recent gains in crude oil prices, driven in part by geopolitical tensions in the Middle East, have strengthened Nigeria’s external earnings position and improved investor sentiment toward the country’s economy.
“We think that this timing is good for us to be able to maybe even refinance some of our expensive past debts, but also to raise more funding for our development at this critical time,” he said. “As of today, market conditions are actually very good.”
Nigeria, Africa’s largest oil producer, has benefited from higher global energy prices, which have supported foreign-exchange inflows and improved perceptions of sovereign credit risk among international investors.
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The spread between Nigerian Eurobonds and U.S. Treasuries has narrowed in recent months, indicating increased investor confidence and lower risk premiums demanded on Nigerian debt.
Despite the improved outlook, the government still faces a large fiscal gap. Officials estimate Nigeria’s budget deficit at about ₦30 trillion this year, requiring significant borrowing to finance infrastructure and development projects.
The government is exploring multiple financing options, including concessional loans from multilateral institutions such as the World Bank and other development finance agencies.
Officials say discussions are ongoing with international lenders as part of broader efforts to stabilise public finances and support long-term economic growth.
Since taking office in May 2023, the administration of President Bola Tinubu has implemented a series of economic reforms, including the removal of fuel subsidies, foreign-exchange market adjustments and tax policy changes aimed at boosting revenue and improving fiscal sustainability.
While these reforms have helped improve investor confidence and increase government revenue, they have also contributed to inflationary pressures, raising the cost of living for households.
Oyedele acknowledged the dual impact of rising oil prices, noting that while they support government revenues, they also add to global inflationary pressures and complicate economic management.
Analysts say Nigeria’s renewed access to international debt markets reflects a cautiously improving macroeconomic outlook, but warn that sustained fiscal discipline will be needed to ensure long-term debt sustainability.
For now, the government appears focused on using a narrow window of favourable market conditions to manage its debt profile more efficiently while financing its widening development needs.
