The Director General of Debt Management Office, (DMO) Patience Oniha has stated that the federal government has raised N4.5 trillion out of the N6 trillion target in the 2024 budget.
She stated this on Monday in Lagos at an interactive session with primary dealers in the Federal Government securities market where she noted that domestic securities remain a major source of federal government spending.
She stated, “Last year, we raised seven trillion Naira as new domestic borrowing. It speaks to the size of the domestic market, its resilience, and its sophistication, unlike we have in many African markets.”
“Out of the new domestic borrowing of six trillion Naira, we have raised N4.5 trillion. For the Ways and Means, out of seven trillion approved for securitisation, we have raised N4.905 trillion. The financial sector has come a long way, and this is another strategic meeting to chart a way forward.”
Mrs. Nadia Zakari, President of the Financial Market Dealers Association (FMDA), stated that the evolving and unique Nigerian business environment necessitates interactive sessions.
Zakari emphasized that these sessions are crucial for both market operators and the Federal Government, enabling informed decision-making as they plan for the rest of the year.
She said, “We stand as financial intermediaries, and we are in a very important position of interacting with other market operators, the end investors and the DMO”
What you should know
In light of higher interest rates from the CBN, the Debt Management Office (DMO) FGN bond offer has seen an increased appetite from the public. The interest rates for the FGN bonds offer for April stood at 18%– one of the highest on record.
- In January, the Federal government realised about N418.19 billion from the domestic bonds market through the DMO
- The federal government in February raised N1.49 trillion from two FGN bonds offer. Both bonds are newly created and offered at a unit price of ₦1,000, with a minimum subscription requirement of ₦50,001,000 and subsequent increments in multiples of ₦1,000. Interest payments on FGN bonds are made semi-annually.
- In March, the federal government returns of the federal government reached N475.67 billion– far below what was recorded in February despite a higher interest rate.
- Furthermore, the Debt Management Office (DMO) announced that the Federal Government of Nigeria raised N626.813 billion in its April 2024 FGN bond auction.
- This amount represents an increase of approximately 32% compared to the N475.67 billion raised in the previous month’s auction. The substantial capital inflow was achieved through the sale of long-term securities, distributed across three distinct bond series with varying maturities.