The federal government has said it may issue another Eurobond worth about $600 million next year.

Reuters quoted the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, to have said this at a London Investment Summit.

According to her, the debt instrument could have a "Diaspora component."

Nigeria issued its debut $500 million Eurobond, which was 2.5 times oversubscribed, in January last year.

The minister said: "We will have a larger bond issue but we may decide that a portion of that should be directed to the Diaspora. We have to watch what is happening with the global markets. We want to make sure that we float this at a time when it will be successful."

Okonjo-Iweala reiterated that the federal government was working towards reducing domestic borrowing due to high interest rates in the country.

She also restated that the government would launch a sinking fund to retire maturing bonds, maintaining that its target was to bring domestic borrowing down to N500 billion a year in the medium term, from N744 billion this year. She also pointed out that overall borrowing was in good shape.

Commenting on the proposed Sovereign Wealth Fund (SWF), she said members of the board had been chosen and would be announced this month once due diligence has been carried out.

"By September/October, we should be getting the team in place and we should be able to launch by the end of the year. We are in the last stage of due diligence," she added.

The aim of the SWF is to save money for future generations, to finance infrastructure and to defend the economy against commodity price shocks. The take-off of the SWF which is expected to be launched with an initial amount of $1 billion, had delayed because of its opposition by the state governors.

She added: "We're at a stage now where it's accepted by the governors. The issue is how much goes into the fund, not whether the fund should exist."

The long-awaited fund was supposed to replace the Excess Crude Account (ECA), in which Nigeria saves oil revenues over a benchmark price, currently $72 a barrel.

Governors get a portion of any money withdrawn from the ECA but the SWF won't give those guarantees, which means they are likely to want most of Nigeria's savings to be kept in the ECA.

The ECA can be too easily dipped into by government, economists say. The account contained more than $20 billion in 2007 but despite years of record high oil prices it now holds around $6.9 billion.

The federal government has been under pressure from fuel importers who are demanding for the payment of unpaid fuel import subsidies.