In response to the ongoing scarcity of US dollars and the subsequent depreciation of the naira, the Nigerian government has introduced a new strategy to address currency challenges. This initiative, announced by the Minister of Finance during a recent business meeting in Lagos, involves the issuance of domestic bonds denominated in foreign currency.

The President’s executive orders paved the way for this initiative, allowing domestic issuance of financial instruments in foreign currency and encouraging repatriation of cash held outside the banking system. However, implementation was delayed to address concerns regarding public trust in government policies.

The Minister highlighted the government’s apprehension over the mounting debt service burden, emphasising the need for alternative financing solutions. The introduction of foreign currency bonds aligns with the government’s objective to diversify funding sources and reduce reliance on debt amid challenges in the oil sector.

By tapping into funds held in domiciliary accounts and targeting Nigerians abroad, the government aims to bolster foreign exchange reserves and stabilise the economy. Moreover, this move underscores Nigeria’s commitment to aligning its foreign exchange market with global standards.

Overall, the introduction of foreign currency-denominated bonds represents a proactive step towards addressing currency challenges and strengthening Nigeria’s economic resilience.