Nigeria has achieved a remarkable victory in the international bonds market that is set to significantly strengthen the country's economic position through the end of 2025. According to investment firm CardinalStone, the nation's foreign exchange reserves are projected to climb to $45 billion by December 2025, driven by the successful issuance of a $2.3 billion Eurobond that attracted overwhelming investor interest.
Record-Breaking Eurobond Oversubscription
The Federal Government of Nigeria's return to the international debt market proved exceptionally successful, with the Eurobond offer recording an impressive 5.5x oversubscription. Total bids exceeded $12.7 billion, far surpassing the initial $2.3 billion offer and demonstrating strong renewed confidence in Nigeria's macroeconomic fundamentals.
CardinalStone's latest Macroeconomic Update highlighted that the instruments carried coupons of 8.62% and 9.13%, set amid positive investor sentiment that was further supported by recent credit rating upgrades from major global agencies. The transaction was managed by international banking giants including Citi, Goldman Sachs International, J.P. Morgan, and Standard Chartered Bank, with Chapel Hill Denham serving as the sole Nigerian bookrunner.
Impact on Forex Reserves and Naira Performance
The substantial Eurobond inflows are expected to provide significant support for Nigeria's external reserves and contribute to greater stability in the foreign exchange market. CardinalStone emphasized that this development bodes well for FX dynamics, particularly in supporting reserve accretion and naira appreciation.
The positive impact is already becoming visible, with the naira demonstrating renewed resilience. Data from the Central Bank of Nigeria showed the local currency climbed to ₦1,436 per dollar at the official window on Thursday, November 6, 2025, strengthening from ₦1,446 recorded the previous day. The naira hit an intraday high of ₦1,441 per dollar with a low of ₦1,434, reflecting improved liquidity and reduced speculative pressure.
Debt Management and Fiscal Implications
While the Eurobond issuance will increase Nigeria's public debt, CardinalStone projects the country's debt-to-GDP ratio will remain manageable at 42.2%, which is slightly above but still close to the 40% sustainability threshold. The firm expects Nigeria's public debt to rise to ₦166.7 trillion by year-end.
A portion of the Eurobond proceeds, approximately $1.1 billion, will be used to refinance maturing Eurobonds due in November 2025, while the remainder will help bridge fiscal shortfalls. The National Assembly had previously approved 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.
According to data from the Debt Management Office, 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.
Expert Analysis and Cautious Optimism
Financial analysts have largely welcomed the successful Eurobond issuance while noting potential risks. Comercio Partners described the achievement as a positive signal for Nigeria's fiscal stability but warned of exposure to foreign exchange risk and increased hard currency interest burdens.
The firm noted that while the inflow boosts external reserves, provides fiscal breathing space, and enhances the government's capacity to meet short-term obligations, a renewed bout of FX volatility could undermine investor sentiment and amplify debt-servicing costs.
Despite these concerns, the overwhelming investor response to Nigeria's Eurobond offering signals strong international confidence in the country's economic direction and represents a significant milestone in Nigeria's ongoing economic recovery efforts.
