Thursday, 25 September 2014
ON the sidelines of the World Economic Forum (WEF) in Cape Town in March 2013, I chaired a book launch starring Nigeria’s formidable first female finance minister, Ngozi Okonjo-Iweala, resplendent in her trademark African traditional dress and matching head-gear. She talked unpretentiously without the affected foreign accent of some Nigerians that have spent two decades abroad. She had recently published a book Reforming the Unreformable on her time – between 2003 and 2006 – as finance minister of Africa’s largest economy, which received surprisingly few reviews in Nigeria. Okonjo-Iweala had been the architect of the deal to pay off Nigeria’s $30 billion debt (the second largest such debt deal with the Paris Club of creditors at the time), and led a team of technocratic reformers seeking to tackle corruption, build efficient public and private institutions, and transform the country into an emerging economy.
Without any notes, Okonjo-Iweala gave a fluent, inspiring, and intrepid presentation, breaking down complicated economic concepts in ways that were easy for the general audience to digest. She berated Nigeria’s failure to create a system of sound planning and financial management of its oil resources; described Herculean efforts to fight vested interests at great personal cost; detailed how she had used her impressive international network to achieve Nigeria’s debt deal; observed that Nigeria’s political class appeared to be intimidated by its economic technocrats; and brushed off concerns about women not being equal to men. Nicknamed Okonjo-“Wahala” (Troublemaker) by Nigeria’s lively press, this was a virtuosic performance.
The National Treasury said yesterday that it had concluded its debut 5.75-year Islamic bond issuance in the international capital markets priced at a coupon rate of 3.90%, “representing a spread of 180 basis points above the corresponding benchmark rate”.
The Treasury said the transaction was more than four times oversubscribed with an order book of $2.2 billion (1-page 128 KB PDF). The bond will be listed on the Luxembourg Stock Exchange. The lead arrangers for the transaction were BNP Paribas, KFH Investment and South Africa’s Standard Bank Group.
The Treasury said South Africa’s decision to issue an Islamic bond was “informed by a drive to broaden the investor base and to set a benchmark for state-owned companies seeking diversified sources of funding for infrastructure development.”
The investor distribution of the sukuk transaction consisted of 59% from the Middle East and Asia, 25% from Europe, 8% from the US and the remainder from the rest of the world, the Treasury said.
Wednesday, 24 September 2014
African states will announce African Risk Capacity (ARC) Extreme Climate Facility (XCF), a multi-year funding mechanism that will issue climate change catastrophe bonds, in an attempt to access private capital to fund climate change adaption on the continent.