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Nigeria to borrow N360 to N450 billion from domestic bond market in Q1 2021 ~DMO

By on January 15, 2021 0 103 Views

By Oludare Mayowa

Nigeria has proposed to raise N360 to N450 billion debt from the domestic bond market in the first quarter of the year, just as it announced that it will offer N150 billion at the January bond auction.

In its debt calendar for the first quarter published on its website, the Debt Management Office (DMO) said it plans to raise N120 to N150 billion each month of the first quarter at the bond market.

The debt on offer includes the 10-year, 15-year and 25-year reopening bond, according to the debt office.

At the first auction of the year slated for January 20, the DMO said it will issue N50 billion apiece in the 10-year, 15-year and 25-year bonds.

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The notice showed that the bonds on offer at the auction this quarter are reopening of the previously issued paper.

“For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume
being auctioned, plus any accrued interest on the instrument,” the DMO said in the auction notice.

Nigeria has proposed a budget expenditure of N13.58 trillion for the year with an overall budget deficit of N5.60 trillion, which represents 3.93 percent of GDP.

According to the Finance and Budget Minister, Zainab Ahmed, this year’s deficit is to be financed mainly by borrowings, which includes N2.34 trillion from the domestic sources, N2.34 trillion from foreign sources, N709.69 billion from multi-lateral/bi-lateral loan drawdowns and Privatisation Proceeds of N205.15 billion.

The government is also spending N3.32 trillion on debt service, which is equal to 24.5 percent of total expenditure, and 12.6 percent higher than 2020 revised Budget.

Provision to retire maturing bonds to local contractors/suppliers of N200 billion is 1.68 percent of total expenditure.

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