The Debt Management Office has described the inclusion of JPMorgan Chase, a top international bank, in Nigerian bonds as evidence of the positive outcomes of President Bola Tinubu’s economic reforms.

JPMorgan, a top international bank that manages the most widely used global bond indices, announced the creation of a new index for locally issued bonds.

The director-general of the DMO, Patience Oniha, said reforms such as the stability of the naira exchange rate have made Nigeria an attractive investment destination for foreign investors.

Ms Oniha said that the clearance of the foreign exchange backlog and overall improvements in the economy, including GDP growth and inflation trends, have also made the Nigerian economy attractive to investors.

“Nigeria met specific criteria for inclusion in the Index, which are liquidity. FGN bonds are actively traded under a two-way quote system, and large volumes of bonds per tenor, well above the minimum of $250 million required for the GBI-EM Edge.

“Nigeria’s weight in the Index, which has 20 countries, is 7.41 per cent. This is, however, the first step towards the inclusion of FGN Bonds in JPMorgan’s flagship GBI-EM, expected in 2027,” she said.

She said the government remained committed to the economic reform agenda and other initiatives aimed at developing the country.

Finance and economy minister Taiwo Oyedele said the decision reflected growing confidence in Nigeria’s economic management. According to Mr Oyedele, the development will help lower the cost of financing the government’s development priorities.

“This inclusion is a clear, independent endorsement of the discipline behind Mr President’s reform agenda. It reflects the confidence international capital markets now place in Nigeria’s economic management, and it lowers the cost of financing our development priorities,” he said.

He said that the federal government remained focused on further reforms needed to secure Nigeria’s full reinstatement in JPMorgan’s flagship index.

JPMorgan announced the creation of the Global Bond Index, Emerging Markets (GBI-EM) Edge, which would include Nigerian bonds. According to JPMorgan, Nigeria is one of the only three countries, the others being Kazakhstan and Egypt, whose local currency bonds are being considered for inclusion in the Index in 2027.

Selected bonds were included in the GBI-EM in 2012. That inclusion brought multiple benefits to Nigeria as it attracted foreign investors to the domestic Nigerian securities market and reduced the cost of issuance by about 200 basis points.

It also opened up foreign investment in the equities market and the banking sector, while increasing external reserves. The country exited in 2015 due to foreign exchange liquidity issues, which the federal government has largely addressed.

(NAN)