Nigeria will look to issue a debut diaspora bond by March to raise funds from Nigerians abroad, after completing a $1 billion eurobond sale this month, a finance ministry source told Reuters on Wednesday.
Nigeria is in its first recession in 25 years and needs to find money to make up for shortfalls in its budget. Low prices for crude and militant attacks in its crude-producing heartland, the Niger Delta, have slashed its oil revenues.
It first announced plans to sell diaspora bonds in 2013 to raise between $100 million to $300 million, but the government at the time could not finish appointing bookrunners for the sale before an election that swept the opposition into office.
The government plans to borrow up to $10 billion, with about half of that coming from foreign sources as it seeks to boost overseas loans to plug funding gaps and lower costs.
But so far only the African Development Bank has publicly confirmed a budget support package of $1 billion. The government has held talks for months with the World Bank, China and other institutions to fund the budget gaps.
In December, the government appointed Citigroup, Standard Chartered Bank and Stanbic IBTC Bank to manage the $1 billion eurobond sale, which it hopes to begin marketing in January.
Remittances are the second-largest source of foreign exchange receipts in Nigeria, after oil revenues. Citizens living abroad send at least $10 billion home annually.
Nigeria is the world's fifth-biggest destination for international remittances after China, India, the Philippines and Mexico, with 5 million Nigerians living abroad sending money back to relatives, according to Western Union.