FG, Austria Float SPV to Fund Investments, Target Vienna Bond Market
Ndubuisi Francis in Abuja
The federal government revealed yesterday that, in collaboration with the Austrian Stock Exchange, it had floated a company, ESME Limited, as a special purpose vehicle (SPV) to fund investments in Nigeria. Minister of Budget and Economic Planning, Senator Abubakar Bagudu, disclosed this while addressing the GPF Global Vienna Meeting in Vienna, Austria, virtually.
Bagudu said there were plans for a bond issuance on the Vienna stock market, to raise capital for investments in key sectors of the Nigerian economy.
According to a statement issued by Ministry of Budget and Economic Planning, Bagudu’s address to the meeting dwelt on, “Financing Africa’s Future: The Vienna Stock Exchange as a Gateway to European Capital Markets for African Government Projects.”
The minister said his ministry and Federal Ministry of Finance, in collaboration with Austrian officials and the Austrian Stock Exchange, had established ESME Limited as a special purpose vehicle to fund investments in Nigeria.
According to him, the company would issue bonds on the Vienna stock market to finance investments in Nigeria by Austrian and other companies in green technology, waste-to-energy, textiles, pharmaceuticals, agriculture, and water.
The proposed financing would target green technology, waste-to-energy, textiles, pharmaceuticals, agriculture and water projects, among other sectors.
The facility is also expected to provide financing for companies seeking to expand existing operations in Nigeria.
On the planned bond issuance through the Austrian capital market, Bagudu said the federal government expected the exercise to open another financing channel for companies interested in investing in Nigeria while supporting the country’s push to attract private capital into productive sectors.
He explained that ESME Limited had two representatives from Ministry of Finance Incorporated and Austrian businessmen on its board.
Bagudu said the President Bola Tinubu administration welcomed the progress made by the company towards the impending bond issuance, expressing confidence that it would strengthen business relations between Nigeria and Austria.
He stated that the initiative was expected to deepen business relations between Nigeria and Austria.
Bagudu said the similarities and comparative economic advantages between both countries provided opportunities for stronger investment relations.
The minister urged Austrian businesses to take advantage of Nigeria’s large domestic market and investment requirements as the government pursued its economic expansion programme.
He told Austrian investors that businesses operating in Nigeria were posting handsome returns, assuring that prospective investors would not regret investing in the country, as existing investors earn over 20 per cent return on investment in US dollars.
Bagudu stated that Nigeria’s large population and demand for capital provided opportunities for Austrian companies, particularly those with expertise in technology.
He said, “We are confident that Nigeria is a proven market of choice with strong absorptive capacity, with over 200 million people. So, Austrian companies and businesses well-rooted in technology can operate profitably in Nigeria.”
Bagudu said Nigeria and Austria shared similar demographics and comparative economic advantages that made the Austrian stock market attractive to Nigeria
According to him, movements in Nigeria’s bond spreads reflected improved confidence in the economy.
Bagudu said achieving the government’s $1 billion economy target by 2030 would require greater access to foreign capital, saying the government considers the Austrian capital market an important potential source of financing.
He stressed that economic reforms implemented by the Tinubu administration over the past three years had improved macroeconomic predictability and investor confidence.
He added that the reforms were designed to remove distortions in the economy, including in the foreign exchange market, and provide a rules-based environment for private capital.
The minister stated that the measures had stabilised the macroeconomy and made the foreign exchange market more predictable for investors seeking to move capital in and out of Nigeria.
He said, “The forex market has stabilised, with free entry and exit. Foreign reserves have risen significantly to over $50bn, providing over 11 months of import cover.” Bagudu cited increased revenues accruing to the three tiers of government as part of the gains from the economic reforms.
