Nigeria's plans to raise funds on global capital markets with a benchmark international bond are on hold until the economic environment improves, Finance Minister Mansur Muhtarsaid on Tuesday.

Sub-Saharan Africa's second biggest economy announced plans last September to issue a $500 million 10-year naira-denominated bond, its first international offer, to raise funds to cover the cost of developing infrastructure.

"We are putting it on hold ... It is not the best time to go into the international capital markets," Muhtar told reporters at a conference in the commercial capital Lagos.

"We still have between now and the end of the year to consider whether we should go ahead or at what time we should go ahead," he said.

The global slowdown has forced Kenya, east Africa's largest economy, to shelve plans for a debut Eurobond, while Uganda and Tanzania have postponed similar plans. Ghana, which in 2007 became sub-Saharan Africa's second country to issue a sovereign Eurobond, has also put back plans for further debt issues.

"Timing is very essential. We don't want to go at a time when market conditions are very turbulent, when we cannot be guaranteed that we will be successful raising the money, when the cost of raising the money is very high," Muhtar said.

Nigeria is the world's eighth-biggest crude oil exporter and its economic outlook has been clouded by falling global energy prices, which have eaten into earnings and risk eroding its foreign reserves.

The central bank said on January 23 that its foreign exchange reserves had fallen 3.31 percent to $51 billion since the start of the year. It has since stopped publishing data about the reserves on its website.

Oil prices have fallen from a peak close to $150 a barrel in the middle of last year to around $40 a barrel in recent weeks, below the benchmark price Nigeria is using for its 2009 budget.

"At the moment we have the benchmark at $45 for budget execution and we know that oil prices are hovering at lower levels," Muhtar said.

"But we are hopeful and optimistic that by mid-year, based on forecasts, oil prices will recover and at least we will be able to cover our benchmark," he said.

He said raising money on the capital markets, as well prioritising spending, were among the ways Nigeria might be able to plug any spending shortfalls and emphasised that its bond issue plans were under review, not abandoned.

"One of the things we wanted to do was to use this to establish a benchmark for others who want to access the international capital markets ... We don't want a situation where we're made to pay very high premiums which will distort the real cost of raising this money and make it difficult for others," he said.

"Over time we will re-assess the situation and see if we need to put that back on the table," he said.