Whether one looks at the $500 million Eurobond in March, issued in a bid to counter the effects of recession by increasing infrastructure spending; the $1billion bond a month earlier or the first $300m Diaspora Bond on the London Stock Exchange (LSE), the appetite for Nigerian debt is not abating. Each of these bonds was oversubscribed. The one in March was priced at 7.5%, down from the 7.875% from the previous month. This time, the bid to raise money from Nigerians abroad fetched a price of 5.625%.
The LSE was quoted as saying “interest in the bond was high from retail investors around the world and was 130% subscribed, raising a total of $300m”, following “the successful raising of $1.5bn through Nigeria’s Eurobond earlier this year”.
As if that was not sufficiently encouraging for the floundering economy in a slowing economic environment in general across Africa, two other Nigerians - one the richest man in Africa and the other a generous philanthropist and former banker - successfully courted the Afrexim bank to raise $1.1bn between them.
Aliko Dangote and Tony Elumelu, of the Dangote Group and Heirs Holdings, respectively, have once again persuaded me that real change in Africa can only be led by Africans.
Why would one get enthusiastic about debt? Is the ability to raise credit from international markets and development finance institutions or the LSE worth the song and dance? Is it not the road to over-indebtedness, the root of policy distress that will compromise the poor and marginalised? Maybe - but what else can Nigeria do?
When presented with a country of more than 180 million people, which is arguably the largest or second largest economy on the continent, yet which is plagued by recession, a forex crisis, infrastructure backlog, pockets of terror attacks and is ranked 136th out of 176 countries on Transparency International’s Corruption Perception Index, the natural reaction of investors could easily be expected to be the opposite of what we are witnessing.
Still, when the face of the borrower is punctuated by men as hard-working as Dangote and Elumelu, who have both built multinational empires out of Nigeria and continue to do so, the markets cannot help crowding the counters.
Dangote, who has created Africa’s own conglomerate, and Elumelu, the brains behind United Bank for Africa, are symbols of Nigerian entrepreneurial grit the world over. These men are celebrated as proof that Nigeria has what it takes to be a world-beater.
Elumelu, through the Tony Elumelu Foundation, is incubating 1000 entrepreneurs from over 50 African countries with his $100m fund to promote start-ups.
He is one of many Nigerians leading by example, investing in their country and the continent. They are not going to solve all of Nigeria’s problems, which are real and well-known. However, their presence at the coalface, alongside many other Nigerian entrepreneurs and industrialists, immensely helps the cause to rebuild an economy which should be way ahead of where it is.
Africa cannot afford a failed Nigeria. To date, this West African country has been held back by its oil curse, among other problems.
Boko Haram has not stopped sowing fear with its attacks, posing a short-to-medium term risk to the Economic Community of West African States.
But, with nearly one in five Africans being Nigerian, these recent signs show the international investment community is still willing to bet on Nigeria turning its fortunes around - as its nett trajectory has been showing over the past 20 years, it represents eternal hope.