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Nigeria seeks capital market support for growth
Nigeria is seeking stronger collaboration with the capital market to drive growth. According to Nigeria's finance minister, the aim is to raise capital to address the infrastructural deficit. This also follows the planned Eurobond Issuance by the government from the International Capital Market to raise funds for the new 2.3 trillion-naira external borrowing captured in the 2021 budget. Tosin Osunkoya, Co-Managing Partner at Comercio Partners joins CNBC Africa for more.
Fri, 20 Aug 2021 11:43:55 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The urgent need to raise capital for infrastructure development in Nigeria has led the government to seek collaboration with the capital market, with plans for a Eurobond Issuance and external borrowing outlined in the 2021 budget.
- The launch of InfraCorp presents an opportunity to attract co-investors for infrastructure projects, but successful implementation will require coordinated efforts from all stakeholders, including regulators, operators, and investors.
- To address default risks associated with Greenfield projects and enhance investor confidence in long-term instruments, government-backed guarantees and sustainable frameworks must be put in place, ensuring a conducive environment for investment in infrastructure and renewable energy projects.
Nigeria is seeking to strengthen collaboration with the capital market to drive growth and address the country's significant infrastructure deficit. The government's aim is to raise capital by tapping into the international capital markets through a planned Eurobond Issuance. The 2021 budget includes a provision for new 2.3 trillion-naira external borrowing, highlighting the urgent need for investment in infrastructure. Toh Sen-Ashukai, Co-Managing Partner at Comercio Partners, shared valuable insights on how the country can attract funds for infrastructure development. He emphasized the importance of creating a conducive environment for both investors and issuers in the capital market. One of the key strategies discussed was the launch of InfraCorp, a project that aims to attract co-investors for various infrastructure projects. Although InfraCorp holds promise, it is crucial for all stakeholders, including regulators, operators, and investors, to work together seamlessly for its success. Osunkoya highlighted the significance of addressing default risks associated with Greenfield projects, suggesting that government-backed guarantees could provide investors with the confidence needed to invest in long-term instruments. The conversation also touched upon the need for sustainable frameworks to support renewable energy financing, with Osunkoya underscoring the importance of continued efforts at both the government and corporate levels. To achieve Nigeria's target of double-digit growth and effectively tackle the infrastructure deficit, collaboration among stakeholders and a conducive regulatory environment are essential.
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