Nigerian’s parliament has approved the issuance of a $1bn Eurobond to finance the nation’s budget deficit and infrastructure projects. This was announced on Feb 8 by the Senate spokesperson, Aliyu Sabi Abdullahi (photo).

“... the only request for approval from the executive was ... for the issuance of $1 billion Eurobond ... for the funding of the 2016 budget deficit, and we immediately granted the approval,” Abdullahi said, highlighting that proceeds of the Eurobond will be injected in two railway projects.

In October, last year, Nigeria’s debt management office set up a one week road-show in the United Kingdom and the USA to promote the $1bn Eurobond, in the presence of Minister of Finance, Kemi Adeosun, and the governor of Central Bank of Nigeria, Godwin Emefiele.

Citigroup and Standard Chartered Bank are the lenders that organized meeting between investors. A source with knowledge of the encounter told the agency that two main factors would determine the rate of the Eurobond. These are oil production level and outlook for the naira.

The same source added that investors interested by the new Eurobond seek a profitability of more than 7%.

Nigeria’s economy has plunged into recession last year, for the first time in 25 years. According to data the International Monetary Fund (IMF), the GDP of the country which derives 70% of its revenues and about 90% of its foreign exchange revenues from oil exports, slumped by 1.7% in 2016.

For 2017, IMF forecast that the economy will grow by 0.8% as compared to World Bank’s 1%.