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22.01.2011 Nigeria

Nigerian government to issue first dollar bond

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The Nigerian government is to issue bonds which pay interest in US dollars for the first time.

The $500m (£314m) bond issue is aimed at investors who want to minimize the risk of currency fluctuation.

However concerns over Nigerian government finances may keep some investors away.

Several investment funds have said they are worried about the way in which the country's oil wealth is being used.

Nigeria's "rainy day" fund, which was largely made up of oil earnings when it was created under the administration of former president Olusegun Obasanjo, held $20bn in 2007 and is now worth less than $400m.

Some are questioning why the fund is being depleted at a time when Nigeria should be benefiting from higher oil prices.

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