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Bond Buyers Stranded in Nigeria Face Prospect of 100% Loss

  • Rates drop to 10-year low as funds rush to short-term debt
  • Central bank has halted dollar sales to foreigners since March
General Economy As Minimum Wage Increase Planned
Photographer: Jean Chung/Bloomberg
Updated on

Foreign investors tempted into buying Nigerian debt paying interest of 13% a year ago are unable to move their cash out of the country.

Worse still, the rate that investors now earn for lending money to the government by purchasing 12-month Treasury bills has dropped to a 10-year low of 3.2%. On top of that, the local currency has twice been devalued against the dollar this year, risking losses when the capital is repatriated.