Nigeria government to raise N270-N330bn in bonds in Q4 – DMO

The Debt Management Office (DMO) has said that the Federal Government has concluded plans to raise between N270 billion and N330 billion ($857 million – $1.1 billion) in local currency-denominated bonds in the fourth quarter, 2017.

The debt office explained that it would auction between N135-165 billion worth of bonds maturing in 2021 and the same amount of the debt maturing in 2027.

In its latest issuance calendar, the debt office said the bonds will be re-opened from previously issued debt.

Nigeria expects a shortfall of $7.5 billion for its 2017 budget, which it plans to raise in foreign loans from the World Bank, offshore and domestic markets.

Similarly, the Africa’s largest economy will issue at least a $2.5 billion Eurobond this year and is still in talks with the World Bank for concessionary loans, the head of the Debt Management Office (DMO) told Reuters on Tuesday in an interview.

Patience Oniha, director general of the Debt Management Office said Nigeria would issue $2.5 billion Eurobond which would take the proportion of its foreign debt close to 40 percent, up from 23 percent, a target its working on as part of its medium-term plan.

She said the DMO is also considering Eurobonds or syndicated loans for $3 billion to repay part of a local treasury bill holding worth 2.7 trillion naira ($8.8 billion).

Also, earlier this week, the budget office said that the Africa’s largest economy had taken N2.305 trillion ($7.53 billion) in total revenue as of June 2017.

According to Director of the budget office, Ben Akabueze, said the aforementioned amount was 91 per cent of the budgetary provision for the half year in the country.

Meanwhile, the Finance Minister, Mrs Kemi Adeosun, on Tuesday said that the Federal Government plans to release N100 billion for capital projects to take its total spending in the 2017 budget for infrastructure to N440.9 billion by next week.

According to her, “We concluded our Sukuk last week, the money will be pushed out this week. As money comes in, we push it out,” Adeosun said. Last week, DMO sold N100 billion in debut sukuk in the local market to finance road projects.

The Minister has said that there is need to lower interest rates charged by the commercial bank so as to reduce the demand for treasury bills.

She added that the Finance Ministry was appealing for approval to refinance about $2 billion worth of treasury bills.

Her words: “One of the strategies that we have for bringing down interest rates is that we reduce the demand for treasury bills and that brings us back to the issue of re-financing. As you know, we are appealing for approval to refinance about $2billion worth of treasury bills. When we do that, the demand for treasury bills reduces.

“What is happening at the moment is that as the treasury bills are maturing, we are rolling them over when we don’t roll them over, we begin to reduce the demand for treasury bills and the headline interest rate should begin to come down”.

“The Finance Ministry and the Central Bank of Nigeria are aligned and we are working together in the interest of the economy, but as the biggest borrower, we want interest rate to be lower and we are working as hard as we can but our side is to try and refinance some of the existing domestic borrowings and also we have to be very careful of crowding out the private sector. We have got to come to the market a little bit to allow the private sector to come because that is the stimulus that is needed to create the jobs”, she said.