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DMO

Nigeria floats $3bn bond to fund #2018Budget

By: Bhodemarz on November 22, 2017 / comment : 0 , , , ,

The Federal Government has floated the much awaited US$3 billion dual series bond to fund approved budgetary expenditures.
A statement from the Federal Ministry of Finance yesterday quoted Minister  Kemi Adeosun as saying that “the government would utilise the proceeds of the Notes in funding the approved budgetary expenditures and for refinancing of domestic debt, as may be applicable.”
According to Mrs. Adeosun, the Notes represent Nigeria’s fourth Eurobond issuance, following issuances in 2011, 2013 (two series) and earlier in 2017.
She noted: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.
“Our economy is beginning to recover, Gross Domestic Product (GDP) having returned to growth in 2017, but we must maintain the momentum behind our investments in order to further drive growth. That is why we are, and will continue to focus investment on the enabling infrastructure we need to broaden economic productivity.
“Successfully extending out debt profile in the international market to 30 years is a key element of that strategy as it establishes a basis for the longer term financing required for transformational infrastructure investment.
“As we have always stated we are progressively replacing debt with revenue, which is reflected in the 2018 Budget proposal. We are establishing the building blocks for inclusive growth and beginning to see the results of the hard decisions that have been made to reset our economy appropriately.”
The aggregate principal amount of the dual series bond is being offered notes under the Federal Government’s US$4.5 billion Global Medium Term Note programme (increased from US$1.5 billion).
The Notes comprise a US$1.5 billion 10-year series and a US$1.5 billion 30-year series.
The Ministry of Finance said “the 10-year series will bear interest at a rate of 6.5%, while the 30-year series will bear interest at a rate of 7.625%, which will be repayable with a bullet repayment of the principal on maturity.
The statement said “the offering, which attracted significant interests from leading global institutional investors, is expected to be closed on or about 28 November, 2017, subject to the satisfaction of various customary closing conditions.”
When issued, the Notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.
Nigeria may apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.
The pricing was determined following a roadshow led by Mrs. Adeosun; the Minister of Budget and National Planning, Senator Udoma Udo Udoma; Central Bank of Nigeria (CBN) Governor Godwin Emefiele; Debt Management Office (DMO) Director-General Ms. Patience Oniha, and the Director-General of the Budget Office of the Federation, Mr. Ben Akabueze.
Commenting on the Notes’ pricing, the DMO Director-General Patience Oniha said: “With the successful pricing of our 4th Eurobond, Nigeria has become one of the few African issuers whose securities have attracted strong investor interest amongst institutional investors across the globe.
“This time, Nigeria issued a new 10-year bond at a yield of 6.500% and a 30-year benchmark, priced at a yield of 7.625%, which despite the longer tenure remains cheaper than our 15-year issuance earlier this year.
“The 30-year is a landmark as the tenor represents the first by a sub-Saharan country other than South Africa and importantly establishes the basis for long term infrastructure funding, which is a priority for this government.”
Oniha expressed satisfaction with international investors’ recognition of Nigeria’s huge potential.
“Perhaps even more important is that with this dual tranche issuance the objective of reducing the cost of government borrowing has been achieved,” she added.



Source: The Nation

Why borrowing $5.5 billion externally is good for Nigeria – DMO

By: Bhodemarz on October 20, 2017 / comment : 0 , , , ,

The Debt Management Office on Thursday explained that the proposed borrowing of N5.5 billion from external sources by the Nigerian government is a good initiative.
President Muhammadu Buhari recently wrote the National Assembly seeking permission to raise the funds.
The $5.5 billion is in two phases, the DMO explained.‎ The first represents “$2.5 billion represents new external borrowing provided for in the 2017 Appropriation Act‎” while the second represents “$3 billion External Borrowing that will be used to repay some of the existing domestic debt.”
The $2.5 billion proposed Eurobond, will be used to finance critical road and rail projects included in the 2017 Appropriation Act,” the agency said in a statement sent to PREMIUM TIMES‎.
It also listed ‎four reasons such funds were better raised externally.

Read the full DMO statement below.
DMO Clarifies Position on USD5.5 Billion External Capital Raising
The Debt Management Office, DMO, in a recent Press Release has clarified the plans of the Federal Government to source for capital from the International Financial Markets. In the Press Release, the DMO stated that the proposed $5.5 billion comprises of two components: $2.5 billion new borrowing and $3 billion for refinancing.
$2.5 Billion
The first component of $2.5 billion represents new external borrowing provided for in the 2017 Appropriation Act to part finance the deficit in that Budget. It will be recalled that the 2017 Appropriation Act provided for new External Borrowing ofN1.067 trillion or $3.5 billion at an Exchange Rate of $/N305. Out of this amount, $300 million has been raised through a Diaspora Bond that was issued in June 2017 leaving a balance of $3.2 billion out of which $2.5 billion is to be sourced through a Eurobond Issuance. The $2.5 billion proposed Eurobond, will be used to finance critical road and rail projects included in the 2017 Appropriation Act. Some of the projects are: construction of a Second Runway at the Nnamdi-Azikwe International Airport; rail projects including Lagos-Kano, Calabar-Lagos, Kano-Kaduna, Ajaokuta-Itakpe-Warri, Kaduna-Idu; and the Bodo-Bonny Road with a Bridge across the Opobo Channel.
These infrastructural facilities will lead to job creation and improve the climate for business thereby contributing to economic growth.
$3 Billion
The DMO also provided further clarifications on the issue of the proposed $3 billion External Borrowing that will be used to repay some of the existing domestic debt. In the explanation, the DMO stated that this was purely a portfolio restructuring activity that will not result in any increase in the public debt as it is simply an exchange of one type of debt (Domestic) for another (External). The DMO stated that the Domestic Debt Stock as at June 30, 2017 included about N3.7 trillion of Nigerian Treasury Bills (NTBs) with tenors of less than one year and at interest cost of about 17 per cent p.a.
The short term nature of the NTB stock and the high interest rate expose the public debt to refinancing risk and high Debt Service Costs. By converting them to External Debt, the tenor will be extended to at least five years while the Interest Cost will drop to about 7 per cent p.a. The savings in Debt Service from this exercise is estimated at over N90 billion p.a.
Benefits of these External Capital Raising
i.     Reduce Debt Service
Reduce the Interest Cost of Borrowing as external borrowing in US Dollars is much cheaper at about 7 per cent p.a. compared to up to 17 per cent p.a. in the domestic market.
ii.    Increase Stability in the Debt Stock
Extend the tenor profile of the debt stock as longer-dated external debt is used to replace short term domestic debt. This would make the debt portfolio more stable, thereby reducing refinancing risk.
iii.   Increase in borrowing space for the private sector
The pressure in the domestic market created by the large government borrowing will be reduced. This will create more space for borrowing by the private sector which will enable them contribute to the growth of the Nigerian economy.
iv.   Increase in Nigeria’s External Reserves
External Borrowing represent foreign currency into the nation’s External Reserve thereby allowing for a stable exchange rate for the Naira.
Other Considerations
The proposed $2.5 billion new borrowing through Eurobonds to part finance the deficit in the 2017 Appropriation Act and the refinancing of existing domestic debt through external capital raising of $3 billion, are consistent with Nigeria’s Debt Management Strategy, whose main objective is the increase external financing with a view to rebalancing the public debt portfolio in favour of long-term external financing in order to reduce the cost of debt and lengthen the maturity profile.
The DMO added that in contracting external debt, a conscious effort is made to exhaust all opportunities available from the concessional sources in order to reduce the level of External Debt Service.
Furthermore, all borrowings are approved by the National Assembly and are included in the Annual Budgets and the Medium Term Expenditure Framework (MTEF).

Source: premiumtimesng

#StateofStates: State Governors advised to avoid External Loans

By: Bhodemarz on October 20, 2017 / comment : 0 , , , ,

BudgIT Nigeria, a civic tech organisation, has expressed worries over the increasing rate of debt profile of states.
Speaking at the launch of the organisation’s state of state report in Abuja on Thursday, Oluseun Onigbinde, BudgIT’s lead partner, said the exchange rate has made it difficult to service such loans.
He said states’ debt rose from N3.03trillion in 2015 to N3.89 trillion in 2016.
According to him, Lagos has 24.2 percent of the total debt stock of state governments, having risen from N500.8bn in 2014 to N734.7bn in 2016.
“Total debt stock of Nigerian states has increased significantly from the 2012 level of N1.79tn to N2.12tn in 2014. With increased inability to meet recurrent expenditure obligations and increased pressure, most states resort to more debt uptake,” he said.
“Total debt profile of states in 2015 and 2016 was N3.03tn and N3.89tn respectively. Lagos state’s total debt stock rose from the 2014 level of N500.8bn to N734.7bn in 2016 – accounting for 24.2 percent of the total debt stock of the state governments.”
Onigbinde, therefore, called on state governments to increase their internally generated revenue by taking advantages of value-added tax revenue, manufacturing, trade, logic and tourism to generate more money.
“Many state governments are confronted by rapidly rising budget deficits as they struggle to pay salaries and meet contractual obligations and overheads due to a dip in oil price from its peak price of about $140 per barrel to about $56 per barrel.
“Over the last few months, many state governments have been devising policy changes with a strong focus on improving internally generated revenue and reining in expenditure.
“State governments need to tremendously embrace a high level of transparency and accountability, develop workable economic plans, take haircuts-especially on overheads-expand their internally generated revenue (IGR) base, and cut down on debt accumulation without a concrete repayment plan.
“The states need to look beyond the rhetorics and commit to a reduction in its operating costs, including significantly slashing its unreasonable overheads bill while freeing up more spending for social infrastructure.
“States will need to link future borrowing to sustainable projects, which can pay back the capital cost of its current loans and improve the overall income profile of the state.”
A report released by the office of the accountant-general of the federation showed that 36 states of the federation spent N2.67 billion toservice external debt in September.
The governors of the 36 states on Tuesday asked the federal government to release the 50 percentbalance of Paris Club refund.

Download the full report via State of states report


Foreign debt, democracy and checks and balances, by Nonso Obikili,

By: Bhodemarz on October 20, 2017 / comment : 0 , , ,

Democracies have been on the wrong end of the publicity stick in recent decades. The rapid economic expansion in relatively autocratic countries like China, Singapore, and South Korea in the 1970s has implanted the idea that democracies might not be best suited for rapid economic growth. Of course, most conveniently ignore the autocracies like Zimbabwe, Venezuela, and Cuba where things go horrible wrong. Still within this context, the argued advantage for democracies is they prevent the worst from happening. While they may not allow too much flexibility in policy, they prevent the kinds of disastrous decision-making that lead to economic collapse. In essence, the “check and balances” prevent policy makers from theoretically destroying the economy through bad decisions.
Nigeria has been a democracy since 1999. At least we have been a democracy in the sense that we have elections, there is rule of law, and there are institutions that are supposed to guard and protect Nigerians and their future. You can argue about how democratic we are in practice but at least we are somewhat better off than we were thirty years ago. Our freedom house score, a ranking of democracies, is 50, which is a bit of a way from the ideal democracy at 100, but is also not as bad as the least democratic countries which have scores around one. The question then, in terms of our democracy’s ability to prevent policy makers from making the worst decisions, is “are we really democratic?”
We can think of this question in the context of the recent debt debate. Just a quick recap, in the face of collapsing revenue due to the crude oil price crash in 2014, the federal government continued its spending spree, opting to bridge the gaps with debt instead. The result has been an acceleration in debts to the point where debt servicing costs now consume about sixty percent of actual revenue. Not satisfied with the precarious situation, the federal government is proposing to continue the spending boom, and is looking to raise an additional $5.5bn from external sources.
Ironically, we have been in this situation before, when we were not a democracy, but during the era of military dictatorships. In the 1980s, faced with the same scenario of collapsed crude oil prices, the military regimes opted to keep the government spending policy going and closed the gap with debt instead. The early 1980s were the period of “jumbo” loans from various external sources. In hindsight we know those decisions were bad as the loans were frittered away, and the debt went on to cripple the activities of government for the next two decades. The country would not get out of that problem until the debt forgiveness deal in 2005, almost 25 years later.
We were not democratic back then and the institutions which should have prevented that outcome did not really exist. There was no debt management office to monitor and publicize actual debts. There was no national assembly to check the actions of the military regimes. The civil society and press were also not in very good shape, in terms of their ability to go against the military regimes.
This time around we are democratic and have all these institutions. Will we end up with the same scenario, with debt problems that cripple government for decades, or will our institutions act to ensure a different and better outcome this time around?
The federal government typically thinks in four years cycles, and on issues such as long term debt problems, it is expected that they will lean towards the path of immediate benefits and not think too deeply about the longer term costs. This is where the other institutions, who are theoretically supposed to take a longer-term view of things, have to stand up and demonstrate that they know their role in democracies. Specifically, the national assembly is the institution charged with protecting the long-term interests of Nigerians and they must demonstrate that we are indeed a democracy, and we are capable of avoiding the worst decisions.
The question of whether this new request to seek for $5.5bn in foreign loans is economically sound or not is not really what is at stake. The real matter is ensuring that we do not fall into the same debt spiral like we did under the military in the 1980s. If we do, then it would mean that our democracy is really only just on paper.

Nonso Obikili is an economist currently roaming somewhere between Nigeria and South. The opinions expressed in this article are the author’s and do not reflect the views of his employers.

 Original piece via guardian.ng


Re: Kemi Adeosun’s ‘Deconstructing The Debt Story’ By Oluseun Onigbinde

By: Bhodemarz on October 10, 2017 / comment : 0 , , , , ,

It is important that public officeholders clarify the issues that citizens are distraught about. One such issue has been the case of rising public debt. Kemi Adeosun's piece comes in the context of the well-rehashed situation that the current administration met upon taking office. With its hail of campaign promises without counting the cost, the Buhari-led government pushed itself into a tyranny of expectations. I guess Nigerian politicians will be more mindful when they make promises, as the campaign pamphlets had programs with at least N19tn yearly to fulfill.
We must also understand that the issue of debt is not treated with consternation, as Kemi Adeosun wrote. It is a right argument that requires our interest in inter-generational equity. If we are amassing the debt that will be a burden on future revenues, it is important to demand more transparency on what exactly we are bequeathing the future and the economic viability of it. Nigeria paid $13bn to settle the Paris Club of creditors mostly tied to frivolous infrastructure that had no economic impact on the current generation.
It must also be said that this administration has not been more transparent than previous governments as regards debt numbers. I reckon that DMO has to be one of the best-managed government institutions with how it maintains an updated register of the national debt. Several officers who worked at state governments where it is nearly impossible to get fiscal numbers and currently at the federal level are surprised at this level of transparency, but we must be vigilant that this not rolled back in a bid to silence varied discussions. Despite the anti-corruption crusade, it has become impossible to get a detailed breakdown of the N1.2tn capital releases as claimed for 2016 budget cycle. Except for NNPC that started its monthly operations and financial reports, this administration has not been more transparent than previous governments, and it needs to sincerely improve this. The Buhari-led government has not provided details of capital releases on the project basis, no bold attempts on open contracting, never applied punitive sanctions to those indicted in Auditor-General reports or any tangible thought on campaign financing, a drain on public resources at all levels. So which improved transparency are we talking about?
Diving into the numbers, the unfortunate thing about the current fiscal management is how it has not shown any belt-tightening approach in the way public officers parade themselves. We don’t know any radical approach to reduce aides of public officers nor has there been any interactive party-level discussions on the National Assembly to rein its cost. In a budget approved during the recession, it is still littered with purchase of cars at N25bn, computer software acquisition at N9bn etc. One would have expected that beyond the serial removal of ghost workers that has not lead to a single prosecution and has always been a public relations stunt for successive governments, the entire Nigerian budgets will solely prioritize not a cluster of administrative capital projects but developmental capital projects with direct impact on the people. The ballpark figure of N1.2tn thrown around has no public details. How can such amount be spent with serial commissioning of projects since the Kaduna-Abuja rail? This means Nigerians are probably not seeing it or certain persons are economical with the truth. Well, I can easily be proven wrong with clear definition of capital projects funded. We continuously hear of the Efficiency Unit as a “placeholder point” but no real understanding of its operations and savings that helped government fulfill regarding bureaucracy.
I am happy that with Kemi Adeosun’s argument, the Federal Government clearly sees where Nigeria’s fiscal problem lies. The critical challenge has always been the size of public revenues, too low for a country of our population and economic size. This is why we must not fetishize our debt-to-GDP numbers currently at 17.1%. That Nigeria has a huge GDP and has not been able to maximize public revenues from it attest to the poor appraisal of the current GDP structure or the approach we have taken that poorly discourage tax payments. From 29% debt-to-revenue ratio in 2014, the Federal Government has moved to 44.7% in 2016. This means that from every 100 Naira that FG receives, it spends 44 Naira on servicing debts. In a recent Pew Research study, it was stated that as at 2015, Brazil spent 42% of its revenue to service debts, being the highest in the world. This shows that while Nigerian debt size might be low, the cost of servicing debt is high among its peers. We must not fall for low debt-to-GDP figures; it is the single incomplete story. Bond interests have not toppled 16% in past year, and the badge that the Nigerian government flashes is that portfolio investors now savor our sweet debt. Who would not with cool interest rates and guaranteed exchange rate exits? The Nigerian government is running a cool social security for the Nigerians who can afford its debt, distorting incentives for the growth of private capital.
It is also unfortunate that FG is also crowding the banks of retail savers launching bond issuance capped at 12-13%. This excludes its Federal Government debt to CBN that has risen from N866bn in February 2015 to N5.189tn as at July 2017. Imagine a scenario at when there are multiple options of bonds and treasury bills at tax and risk-free rates, which bank would borrow to the private sector? In the 2016 Budget Implementation Report by the Budget office, it was stated that “Credit to government grew by 27.44% when compared with the end September 2016 figure of N3.66 trillion….Credit to the private sector (Cp) slumped by 2.93% to ₦21.98 trillion at end-December 2016 from ₦22.65 trillion at end-September 2016 indicating crowding out .”
Think of a country with the debt to the government at a faster pace than credit to the private sector that also needs private capital to reach growth rates of 7% in 2020 as stated in its Economic Recovery and Growth Capital (ERGP). It is also important that government rates have been private lending benchmark in Nigeria now around 25%. With this administration, the only business in town as been government. This administration made a chore out of commissioning private plants but underneath the numbers is a frustrated Nigerian who can’t get capital from the bank because fiscal management have disincentivized this. This is why conversations of debt should not be in size. It is how does FG reduce the cost of borrowing and most especially the domestic offerings that now touches every upper and middle class bracket of the society.
Nigeria’s debt service costs will reach N1.6tn in 2017, closing on its personnel costs of N1.8tn, this is the worry that should be triggering debates on well-structured quantitative easing not government out-borrowing everyone in the space. The current approach of substituting local debt with dollar-denominated debt is also faulty. What should be the purpose of raising external debt? With oil being our main foreign earner at 95% of receipts, is Nigeria not supposed to be borrowing for infrastructure or making investments to correct this imbalance that puts Nigerian currency on a wrong footing every time that oil markets go into a dip?
As stated in the Economic Growth Recovery Plan “Nigeria’s peers raise an average 16 per cent of GDP from non-resource taxes; Nigeria raises just 3 per cent (2015).” The plan also states a target to “increase tax to GDP ratio from the current 6 per cent to 15 per cent during the period.” With a targeted GDP of N137.331tn in 2020, we are talking about tax revenues of N20tn, which is nearly eight times the current total non-oil revenue taxes. This means Nigeria needs to at least multiply its taxes eight times to meet the 2020 target. Despite the efforts shown by Kemi Adeosun in the piece, it shows that it will always be inadequate without a proper reflection on why do we have a huge GDP but little taxes? What is the structure of the GDP that makes it impossible to collect taxes? Has the Nigerian government shown enough faith in the management of public taxes that make it more deserving? These are the conversations that need to be honked because the current approach is a reflection of growth rates in the past and shows that without robust thinking our public revenues will not rise.
I believe the debt debate is rooted in the fact that Nigerian government is taking the escapist approach, racking up debt in quick numbers, rapidly forgetting where before exit of creditors. This escapist approach of taking gradual steps on revenue but giant footsteps on debt is what is being questioned. Nigerian leaders in 18 months have shopped everywhere - AfDB, World Bank, retail savers, bondholders, Eurobond, portfolio investors, Sukuk bonds, treasury bills to pay its own cost. A dive into its budget implementation reports shows that its numbers doesn’t add up such as how did Nigeria finance actual deficit of N1.02tn for 2016 after counting at bond receipts. How is FG also entitled to Paris Club refund and what is the source of the N1.64tn extra-statutory fund provided to states?
In fact, most of the projects tied to these debts especially rail do not have any known economic importance and are not fastened to the idea that such projects should be self-liquidating. They are mainly for political expediency, and this is why this debate is necessary. The Nigerian government should provide effective plumbing in raising revenues, rein on debt service costs with favor for long-term bonds as well as rates that consider private sector lending, evidently reduce overheads and administrative capital items and overall unleash transparency on every issue. Here we see monetary authorities (CBN) limiting liquidity in a bid to keep Naira at a preferred value by mopping up funds in circulation through borrowing, the fiscal authorities (government) keeps feasting on expensive debt while everyone except their bondholders leans through. The Nigerian government needs a lot of rigorous thinking as well as caution.

Seun Onigbinde is the co-founder of BudgIT. He tweets via 


Source: saharareporters.com

FG releases #100billion Sukuk bond proceeds for 25 road projects

By: Bhodemarz on October 06, 2017 / comment : 0 , , , ,

The Federal Government on Thursday released the proceeds of the N100 billion Sukuk bond for 25 road projects across the country.
The Minister of Finance, Mrs. Kemi Adeosun, handed over the N100 billion proceeds cheque to the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, in Abuja.
The federal government had issued the sovereign debut Sukuk of N100 billion in September, which was successfully completed last week.
The Sukuk bond has a tenor of seven years.
Adeosun said the offer was oversubscribed to the tune of N105.87 billion.
She also said the milestone was a sign of confidence in the Nigerian economy and the administration of President Muhammadu Buhari.
The minister added that the Sukuk proceeds would unlock the potentials of Nigeria.
She said: “This is the first Sukuk bond issuance for Nigeria. It is about financial inclusion and deepening of our financial markets. The proceeds will be used to further support government capital spending for 2017 – the construction and rehabilitation of 25 key economic roads across the six geo-political zones of the country.”
“The roads will ease commuting, spur economic activities across the country and further close our infrastructural gap.”
“Each of the geo-political zones of the country is expected to receive the sum of N16.67 billion for road projects in their respective zones.
The North Central and South- South Zones accounted for five each of the 25 key economic road projects, while the North East, North West and South East have four road projects each.
“Three projects are to receive funding from the Sovereign Sukuk proceeds in the South West Zone.”
Earlier, Fashola commended the Finance Minister, the Director-General of Debt Management Office, Ms. Patience Oniha and the financial advisers for the bond issuance for their painstaking efforts aimed at realising the milestone.

He assured the ministry’s contractors that the federal government was committed to the funding of its infrastructural projects across the country.

Source: thenationonlineng.net

FG to issue $2.5bn Eurobond for capital projects

By: Bhodemarz on September 29, 2017 / comment : 0 , ,

The Federal Government will issue Eurobond to raise $2.5 billion before the end of 2017 to fund critical infrastructure in the country, the Debt Management Office (DMO) has said yesterday. This is just as the central government advocated for an urgent action towards economic development and diversification as the country gradually exits recession. DMO’s Director-General, Ms. Patience Oniha, stated this at the 2017 Nigerian Debt Capital Markets Conference & Awards organised by the FMDQ OTC Securities Exchange in Lagos.
Oniha said that the borrowing would enable the country bridge the gap in the 2017 budget presently facing liquidity problem to finance some capital projects. She said that the proposed Eurobond issuance would complement the $1.5 billion raised from the international market in March 2017.
Oniha stated that the nation’s Treasury Bills portfolio presently stood at N3.7 trillion, noting that it planned to refinance it with foreign borrowing to reduce pressure on the domestic market. She said that Nigeria needed to build stronger and responsive institutions that could support infrastructure agenda of the government.
The DMO boss added that government had proposed to channel new borrowings into capital investments instead of consumption. “The debt ratio is not tangible and adequate components of borrowing because it is not going into funding others than capital investment.
Let us channel new borrowings into capital investment instead of consumption,” Oniha said. On the N100 billion Sukuk Bond, she said that the Federal Government had identified 25 road projects to be funded with the proceeds.
She said that among the roads listed was Ore–Sagamu road, Kaduna bypass, Enugu Port Harcourt road, Kano–Maiduguri, Benin– Lokoja road, among others. According to her, government has also decided to finance other Trunk A roads that would provide support that is needed to accelerate nation’s developmental goals.
She said Nigeria needed to build stronger and responsive institutions that can support infrastructure agenda of the government. “We need to build the business in terms of products that meets specific needs of investors,” she stated. Oniha said that the acceptance of the offer was an indication of the viability of the instrument as an investment option as well as a demonstration of utmost faith in the economy. Speaking earlier, Vice President Yemi Osibanjo called for an urgent action towards economic development and diversification as the country exits recession.
Osibanjo, who was also represented by Oniha, said that assessing the debt capital market was needed to bring the desired economic growth and diversification.He said that with the growing population, the private sector participation was also needed to complement government efforts in area of infrastructure development.
The vice president stated that the private sector was efficient in handling projects anywhere in the world. Osinbajo added that the current determination of the Federal Government on the ease of doing business was to enable more investment flow into the country.

“Ease of doing business makes it easy for business start-ups to grow their business,” Osinbajo said. The Finance Minister, Mrs. Kemi Adeosun, noted that government was restructuring the economy to give nation’s development a leap.

Source: newtelegraphonline.com

FGN Sukuk beats expectations, oversubscribed by 6%

By: Bhodemarz on September 28, 2017 / comment : 0 , , ,

The debut N100 billion Sukuk offer by the Debt Management Office (DMO) was oversubscribed by 5.8% approximately 6%.
According to a statement issued by the office, investors in the bond, which has a seven-year tenor, included pension funds, banks, fund managers and retail investors.
DMO said the total subscription to the Sukuk offer was N105.88 billion.
Patience Oniha, DMO director general, said the acceptance of the offer was an indication of the viability of the instrument as an investment option as well as a demonstration of utmost faith in the economy.
The offer for the bond, which lasted for five days, closed on September 22.
Oniha commended the federal government and in particular, Kemi Adeosun, minister of finance, for the policy support that led to the success of this initial offer.
In a previous interview, Oniha had said proceeds from the offer would be used to fund the development of 25 economic roads in the six geo-political zones in the country.
Officials of the DMO, ministry of power, works and housing and Central Bank of Nigeria (CBN) had advertised the investment instrument in roadshows to five major cities in the country – Lagos, Port Harcourt, Kano, Abuja and Kaduna.
Investment experts are optimistic that a new instrument has been introduced to Nigeria’s capital market and has added to the variety of products available to domestic issuers and investors.
According to the statement, the bond achieved one of its aims, which was to offer new investors an opportunity to participate in Nigeria’s growing capital market.
“With this positive development, the DMO has been energised to continue its role of meeting the government’s funding needs, as well as introducing new instruments to develop Nigeria’s capital market,” it said.
DMO also said it hoped that the proceeds would enable the ministry of power, works and housing to commence work on the roads.

The Christian Association of Nigeria (CAN) had expressed concerns over the bond, saying it was a quiet way of islamising the country.

Source: www.thecable.ng

FG to auction N135bn bonds on Sept. 27– DMO

By: Bhodemarz on September 19, 2017 / comment : 0 , ,

The Federal Government has offered for
subscription by auction N135 billion worth of bonds in its Sept. 27
auction, the Debt Management Office (DMO) said.
The offer circular obtained from its website on Tuesday in Abuja,
stated that it would sell N35 billion of a bond maturing in July
2021 at 14.50 per cent.
It would also sell N50 billion at 16.28 per cent to mature in March
2027, while another N50 billion of paper would be sold at 16.24 per
cent to mature in April 2037.
All the bonds on offer are re-openings of previous issues, the circular said.
Nigeria issues sovereign bonds monthly to support the local bond
market, create a benchmark for corporate issuance and fund its budget
deficit. 
Source: www.nan.ng
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