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HomeTop NewsNigeria plans to raise N240 bln debt in Q1 to fund deficit...

Nigeria plans to raise N240 bln debt in Q1 to fund deficit ~DMO

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By Oludare Mayowa

Nigeria’s plans to open the domestic debt market this year with an auction of between N140-N160 billion bonds on Wednesday, January 19, according to the debt calendar issued by the Debt Mangement Office (DMO) seen by the Global Financial Digest on Monday.

The debt office plans to raise between N70 and N80 billion apiece in the 10-year and 20-year bonds at the first auction of the year.

The bonds being offered are reopening of the previously issued paper and they are expected to mature in less that the face value.

For instance, the 10-year paper is expected to mature in 3-year and 11-month while the 20-year paper is expected to mature in 19-year 11 months.

Also, the DMO said it will raise a total of between N210 and N240 billion apiece in the bond market in the first three months of the year.

It said it will raise an average of N140 and N160 billion every month in the 10-year and 20-year bonds in the first three months of the year.

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Nigeria usually issue bonds on monthly basis to finance a portion of its budget deficits, which has been put around N6 trillion this year

The government has projected aggregate revenue available to fund the 2022 budget of N10.74 trillion (inclusive of GOEs), which is 32 percent higher than the 2021 projection of N8.12 trillion.

The projected revenue is, however, short of the total expenditure of N17.13 trilion in this year’s budget, leaving the government to raise debt to finance the overall budget deficit of
N6.39 trillion for 2022.

This year’s budget deficit represents 3.46 percent of the country’s Gross Domestic Product (GDP), with a portion of the deficit is expected to be raised from the domestic debt market.

The government said it will raised N2.57 trillion from the domestic debt market, N2.57 trillion from the foreign debt source, N1.16 trillion from multilateral/bilateral loan drawdowns and the balance of N90.7 billion from privatisation proceeds.

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