With the oil and gas sectors contributing only 8.34 per cent to real gross domestic products (GDP) in the first half of the year (1H 2021), the country’s macroeconomic resilience achieved through a broad and diversified economy may positively impact on its fortunes to access funding at the international capital market.
Also, as against growing public criticism over the rising public debt, the country’s economic managers have insisted that Nigeria maintains one of the lowest debt to GDP ratios of its peers, pointing out that increasing debt service cost is being managed by revenue growth.
The government maintains that public debt remained well balanced composition with majority of external debt and congressional/semi-concessional in nature.
Economic activities rebounded in the fourth quarter of 2020 (Q4 2020) and Q1 2021 back to positive growth and posted Q2 5.01 per cent year-on-year growth.
The performance is expected to bolster investor confidence in the economy as the federal government prepares issuance of N2.343 trillion ($6.2 billion) Eurobonds in the International Capital Market (ICM) to partly finance its N5.2 trillion 2021 Budget deficit.
The federal government is capitalising on improved macroeconomic fundamentals,
as the accumulation of reserves within the year is expected to provide substantial buffers against external shocks.
International reserves stood at about $34 billion as at August, able to cover payments for about 8.75 months of import cover.