The Director-General of the Debt Management Office (DMO), Patience Oniha has stated that Nigeria has been able to raise its domestic borrowing of N7.043 trillion for 2023.
She stated this during an interview with CNBC Africa on the sidelines of the discussions for the establishment of the African Debt Managers Initiative Network spearheaded by the African Development Institute of the African Development Bank in Abuja.
She observed a strong demand for the securities offered by the federal government, emphasizing the depth of the market and the increasing influx of funds into the systems and institutions that engage with the federal government’s securities.
While responding to questions on the 2024 outlook for the local and international debt market, she stated
- “I’m happy to say that in 2023, the new domestic borrowing was N7.043 trillion, and as we speak that has been raised in full. I don’t need to explain how we raised it, but it has been raised.
- When you compare that to the N3.5 trillion of last year, it tells you that the market has depth for you to raise money”
She further explained that the majority of the investors in these securities are institutions like banks, asset managers, pension funds, and insurance companies whose balance sheet is growing.
She noted that the subscription rate of the FGN’s securities means that there is liquidity and they (DMO) expect that to continue going into the new year.
Backstory
In September, the Debt Management Office (DMO) revealed that Nigeria’s overall public debt surged to N87.38 trillion by the end of the second quarter.
This marked a significant rise of 75.29%, equivalent to N37.53 trillion, compared to the N49.85 trillion reported at the end of March 2023. Of the total debt, domestic loans accounted for N54.13 trillion, constituting 61.9% of the entire debt.
Insights
The Debt Management Office (DMO) offers a range of securities to investors who are interested in FGN bonds. In recent times, these products have been well received by investors.
In October, the FGN Sukuk bond was oversubscribed by 435%- it was billed to raise N150 billion but realized N652.82 billion.
Beyond that, FGN long term 30year bonds have also been well received by the investing public. In the November auction, the 30-year bonds were oversubscribed by over 300% and raised N330 billion from the target of N90 billion.