Dollar bonds of Nigeria dropped over 2.5-3% after the nation signaled that its plan to remove energy subsidies might be delayed beyond its earlier June 1 deadline. Finance Minister Zainab Ahmed said that the subsidy plan cannot be ended while the government transition is in progress. Current Nigerian President Muhammadu Buhari’s outgoing government had fixed June 1 to exit fuel subsidies. However, given political backlash the nation is set to see a new government under President-Elect Bola Tinubu’s incoming administration. The subsidies had cost Nigeria about $10bn last year and is set to cost them a further $13bn this year. These subsidies are said to have consumed almost all of the country’s oil earnings. Besides, due to the initial deadline of June 1, Nigeria had set aside reserves to cover the expenses only for the first six months of the year. This would imply that the government will have to prepare a supplementary budget to make up for the additional cost.
Its 7.875% 2032s fell over 2 points to trade at 72.2, yielding 13.2%
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