DMO to sell monthly bonds in 2017, N130bn planned for March

In its bid to fund its budget, outside the anticipated foreign loan facilities, Nigeria, through the Debt Management Office (DMO) has concluded plans to offer various values of bonds for sale on monthly basis, in 2017.

This is to be kick started on March 15, with N130 billion bond becoming DMO’s third debt sale for 2017.

Given anticipated return on yield, expectations are high among officials that many interested buyers will be targeted.

Just recently, the Office had floated a N5,000-denominated bond, which targets lower income earners.

The debt office said the bond will be broken down into units of N45 billion, with maturity due in 2021; N50 billion to mature in 2027, and N35 billion due for 2036, using the Dutch auction system, which is billed to offer a high return in price value, in order to attract patronage.

the DMO in its weekly update on its website, www.dmo.ngov.fgn-bond, on Tuesday, said the need to rout alternative to delays in perfecting the various loan facilities from the international creditor agencies, including IMF, World Bank and African Development Bank (AfDB), totaling $29.7 billion, gave birth to the initiative.

Read also:  Access Bank posts N90.3bn profit in 2016

Apart from the fact that the National Assembly is yet to give its nod to any loan application lying before it since October 2016, there is also the fear that Nigeria may not get the needed support from the institutions due to some unmet terms.

But the DMO Chief Executive Officer, Abraham Nwankwo, told newsmen in Abuja that exploring other avenues of funding the economy did not amount to loss of hope on the other known approaches, especially, those from the international financial institutions.

“We (DMO) are putting everything on the table, all aimed at making the economy to bounce back.

“Nigeria has not reached its loan limit, let alone exceeding the limit. But the bond system is actually a normal approach to budget funding, as is done in other economies of the world, ” Nwankwo said.

It was learnt that settlement of the current bond is expected on the day following the issue, but DMO explained that the bonds are expected to reopen offers for the previous ones, not yet completed, whereas that for 2027 and 2036 are to be an entirely new issues.

Nigeria expects a 2.36 trillion naira budget deficit for 2017, with half of it now to be funded through domestic borrowing, otherwise referred to as bonds.

RipplesNigeria ….without borders, without fears

Click here to download the Ripples Nigeria App for latest updates

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now