AfDB advises Nigeria, others on Eurobonds

Nigeria and other governments in Africa need to be tougher when negotiating the terms of Eurobonds and commercial loans, the African Development Bank (AfDB), warned on Monday.
Its President, Dr Akinwumi Adersina, said some external debts mature before the infrastructure projects they fund start generating returns, which raises refinancing risks. Neither should African borrowers be “price takers,” he said.

“The short-term maturity of some of these debts do not match the long-term revenue streams. You are going to have to pay back when you are not earning the money. These bonds are oversubscribed because people see opportunities to make a killing,” Adesina said in an interview in Johannesburg. “
Governments have increased their issuance of dollar and euro bonds in recent years as loose monetary conditions in developed nations push global investors to buy higher-yielding assets, not least those in emerging markets.

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