The Debt Management Office (DMO) has raised a total of $15.668 billion for the federal government to fund its budget deficit in a period of 10 years – from January 2011 to September 2021.
Under the 2021 fiscal year, the debt office has also helped to raise about 90 per cent of domestic borrowing through FGN bonds and FGN Savings bonds to finance the deficit component of the 2021 appropriation Act. Another N250 billion was raised via Sukuk. What is outstanding is N345 billion.
Director-general of the debt office Ms Patience Oniha made the disclosure yesterday on the sideline of a workshop on understanding Nigeria’s public debt management organized for Clerks and members of staff of the secretariats of Senate committee on local & foreign debt and House committee on Aids, Loans & debt management.
“The DMO’s activities are not limited to domestic financial markets. It may please you to note that the DMO has raised over $15.368 billion through Eurobonds and a $300 million Diaspora Bond to finance Budget deficits and various projects,” Oniha said yesterday in Niger state.
Participants at the session listed their expectations for the training, including to be better equiped with the knowledge of debt management, debt sustainability and indepth understanding of the activities of the debt management office in the management of public debt.
For the domestic borrowing for this year, the government has about N3.145 trillion to borrow from the appropriation Act and the supplementary budget. N2.8 trillion has been raised.
Oniha disclosed that another Sukuk offer would be done within the next two weeks and the remaining would be raised from FGN bond auction this December.
While the Sukuk is transforming road infrastructure across the country, Nigeria became the first country in Africa and the fourth in the world to issue a Sovereign Green Bond. Through the issuance of these securities, Ms Oniha said the DMO has contributed immensely to the domestic financial markets and provided investment opportunities for local and foreign investors.
On the external front borrowing which is $6.18 billion, $4 billion was raised in September. The government recorded high demand of over $12 billion but was suspended on the advice of the bond advisers for the government to drop the interest rate to watch market reaction. There is $2.18 billion to raise. “We’ve done quite a lot to fund the 2021 budget.”
The DG said the federal government maybe issuing another Green Bond in 2022 when the reporting process and other requirements on previous ones are completed. “The DMO is extremely supportive of borrowings that finance infrastructure,” she said.
The government issued a green bond in 2017 and another one in June 2019. In total, we have about N25.89 billion of green bonds we have issued. They were targeted at renewable projects.
She said through the various government securities issuance in the international capital markets, the sources of funding for the federal government have expanded, while it created opportunities for Nigerian corporates including banks to raise capital abroad.
Oniha said the DMO couldn’t have achieve success without the support of its stakeholders. One of such stakeholders the DMO has to work closely with in its borrowings due to the various provisions in the DMO Act and the Fiscal Responsibility Act, 2007, is the National Assembly.