Indian-origin UK minister nudges Nigeria to issue ‘masala bonds’

Alok Sharma, one of the Indian-origin cabinet ministers in the Boris Johnson government, has encouraged Nigeria to issue bonds on the lines of India’s ‘masala bonds’ on the London Stock Exchange to raise funds for infrastructure development.

The ‘masala bonds’ were introduced after the November 2015 visit of Prime Minister Narendra Modi to raise funds in rupees via the London Stock Exchange. Over Rs 90 billion have so far been raised through such bonds issued by private and state entities.

Sharma, who is the international development secretary, highlighted the success of the ‘masala bonds’ during his first overseas visit to Nigeria last week. He was previously instrumental in initiating the ‘masala bonds’ in 2016 as the then minister for Asia in the Foreign Office.

The UK is looking to provide £1 million through a new partnership to give countries like Nigeria the expertise to develop local currency bonds such as the ‘masala bond’, which would enable them to raise funds without taking on the significant risk associated with borrowing in foreign currencies such as US dollars.

Sharma’s department said: “This would build on the success of India’s Masala Bond market in London. Mr Sharma was part of the team that helped develop the masala bond market in London in his previous role as the Prime Minister’s Infrastructure Envoy to India”.

“This allowed India to raise money on the London Stock Exchange and invest in infrastructure and create jobs,” it added.

According to Indian government figures, there are currently 25 rupee denominated ‘masala bonds’ on the London Stock Exchange, including those issued by the Kerala Infrastructure Investment Fund Board, Indian Railway Finance Corporation, Indian Power Finance Corporation, Indian Renewable Energy Development Agency, Housing Development Finance Corporation, National Thermal Power Corporation and the National Highways Authority of India.

Sharma, 51, is among three Indian-origin ministers around Johnson’s cabinet table, besides home secretary Priti Patel and chief secretary to the Treasury Rishi Sunak. Sharma has previously been a junior minister in various departments.

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