The Nation Newspaper

Tag: Debt Management Office (DMO)

  • August 2018 FGN bond auction oversubscribed

    The Federal Government of Nigeria (FGN) Bond Auction for August 2018, which was conducted by the Debt Management Office (DMO) on Wednesday, August 15, 2018, at which N90 billion Bonds were offered in three tenors – 5 years, 7 years and 10 years – was oversubscribed.

    A statement from the DMO said “the total subscriptions received from bidders at the Auction were above N100 billion.”

    The statement added that “allotments were made to successful bidders at 14.39% for the 5-year, 14.60% for the 7-year and 14.69% for the 10-year Bond, which are consistent with the rates in the secondary market for the Bonds offered at the Auction.”

    “A total of N100.09 billion was allotted to competitive and non-competitive bidders at the Auction and the proceeds will provide additional financing for the implementation of the2018 Appropriation Act” the statements read.

    Read Also: June FGN bond oversubscribed

    On Tuesday, the Director General of the DMO, Ms Patience Oniha had disclosed that to help fund the 2018 capital budget, the Debt Management Office (DMO) has borrowed N410 billion from the domestic market so far.

    Patience Oniha said this amount is part of the N793 billion that will be borrowed from the domestic market this year.

    According to Oniha, “the DMO has already started new borrowing by raising N410 billion for domestic borrowing in 2018.”

    Though the DMO has not started external borrowings for the year, Oniha noted that the 2018 Appropriation Act authorized an external/foreign borrowing of N850 billion, the DMO she said “will try to get cheaper ones first.”

  • FG reduces exposure in domestic borrowing – DMO

    FG reduces exposure in domestic borrowing – DMO

    The Debt Management Office ( DMO ) says the Federal Government is reducing its exposure in the domestic market to pave way for borrowings by corporate entities.

    Ms Patience Oniha, the DMO’s Director-General, told newsmen in Lagos that government had reduced its exposure in the bond market for corporate entities to raise funds.

    “We are reducing the amount we borrowed in the domestic so that there will be space for corporate bodies,’’ the director-general said.

    She said apart from the government decision to reduce domestic borrowing, the Securities and Exchange Commission ( SEC ) and the Nigerian Stock Exchange ( NSE ) had issued new guidelines and reduced fees for people to borrow.

    Oniha said that apart from issues of infrastructure for trading in fixed income securities, the market regulators had done a lot of ground work to make the market attractive.

    She said DMO was a friend with all regulators, noting that they work in teams and groups to get to “where we are today’’.

    “We want to see varieties of products to be traded in the market apart from government bonds for people to have more varieties of products to trade on.

    “We are expecting development in the market; we want to see corporate bodies to raise bonds in the market for people to have more products to buy apart from the government bonds,’’ Oniha said.

    The director-general said that borrowing from the bond market would make books of corporate entities to be balanced instead of concentrating on banks’ loans.

    She said that the fixed income market had grown when compared with what we had 10 years ago.

    Oniha said that government expected the fixed income market to develop significantly long time ago.

    Read also: DMO to redeem N198b T-Bills

    The director-general had recently said the Federal Government would focus more on external borrowings to reduce debt servicing.

    She said that in order to go forward the debt office would concentrate more on external borrowings at cheaper rates.

    Oniha said that government had decided to borrow more externally to repay Treasury Bills ( TBs ) that mature every now and then.

    “Going forward as we do more borrowing based on the Appropriation Act, what can we do to make sure that debt servicing at least, if it does not come down, remains manageable.

    “We have decided to do more of external borrowings at cheaper rates,’’ Oniha said.

    NAN

  • FG, states’ public debt stock hits N19.6trn – DMO

    FG, states’ public debt stock hits N19.6trn – DMO

    Nigeria’s public debt stock for both the Federal Government and the states as at June 30 stood at N19.63 trillion, a document by the Debt Management Office (DMO) says.

    The document was obtained from the DMO website on Monday in Abuja.

    Giving a breakdown of what each tier owed, it said the external debt stock of both tiers was N4.6 trillion while the domestic debt stock of the Federal Government was N12 trillion.

    It said the domestic debt of states stood at N3 trillion.

    It also said the Federal Government spent N253.3 billion on domestic debt servicing in the second quarter of 2017 (April to June).

    Giving a breakdown of each month’s allocation, it said N87 billion was spent on debt servicing in April, N73 billion in May and N75.2 billion in June.

    Domestic debt is the amount of money raised by any government denominated in local currency and from its own residents.

    It consists of two categories: Bank and Non-Bank borrowing.

    Domestic loans are issued through government debt instruments such as Nigerian Treasury Bills, Nigerian Treasury Certificates, Federal Government Development Stocks, Treasury Bonds, Ways and Means Advances.

    In another development, the Federal Government offered for subscription two-year savings bond at 13.81 per cent and three-year savings bond at 14.81 per cent.

    According to the offer circular derived from the DMO, the two-year bond will be due in September 2019 while the three-year bond will be due in September 2020.

    It, however, did not state how much was offered, but added that the maximum subscription was N50 million at N1,000 per unit, subject to minimum subscription of N5,000 and in multiples of N1,000.

    The website said that the bond was fully backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders.

    The savings bond issuance is expected to help finance the nation’s budget deficit.

    It is to also part of the Federal Government’s programme targeted at the lower income earners to encourage savings and also earn more income (interest), compared to their savings accounts with banks.

  • FG to auction N135bn bonds August 23 – DMO

    FG to auction N135bn bonds August 23 – DMO

    The Federal Government has offered for subscription by auction, N135 billion bonds in its Aug. 23 auction, according to the Debt Management Office (DMO).

    The offering circular obtained from the DMO’s website on Tuesday in Abuja indicated that it would sell N35 billion of a bond, to mature 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 reopening of previous issues, the circular said.

    Nigeria issues sovereign bonds monthly to support the local bond market.

    It also created a benchmark for corporate issuance to fund its budget deficit.

  • FG offers monthly Savings Bond at 13.535%, 14.535% for investors

    FG offers monthly Savings Bond at 13.535%, 14.535% for investors

    The Federal Government has offered for subscription two-year and three-year Savings Bonds to investors at 13.535 per cent and 14.535 per cent, respectively from today Monday, August 7 to Friday, August 11, 2017.
    A statement from the Debt Management Office (DMO) released on Sunday said the two-year bond will be due in August 2019, while the three-year bond has a maturity date of August 2020.
    According to the statement, “the offer has minimum subscription of N5,000 with increases thereafter in multiples of N1,000 up to a maximum subscription of N50 million.”
    According to the DMO, “the bond is backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders.”
    The DMO stated that the savings bond will help broaden the country’s funding base.
    The FGN Savings Bond is targeted primarily at retail investors to enable them contribute to the development of the country, while also earning good returns on a safe investment in a Sovereign instrument.
    The FGN Savings Bond was launched by the DMO in March 2017 and is issued every month through stockbroking firms trading on the Nigerian Stock Exchange.
    The FGN Savings Bond is promoting the savings culture in the country and enhancing financial inclusion.
    Since its introduction in March, the FGN Savings Bond has attracted a lot of new investors to the FGN Securities market with its attractive features.
    The income earned on the FGN Savings Bond is exempted from taxes and it can be traded in the secondary market on the Nigerian Stock Exchange.
  • Lack of funds: DMO stops states from borrowing

    Lack of funds: DMO stops states from borrowing

    The old practice where States had easy access to borrowing from either foreign or local borrowing windows has now been halted.

    The new Director –General of the Debt Management Office (DMO), Ms. Patience Oniha made this disclosure yesterday in Abuja when the Edo State Governor, Mr. Godwin Obaseki visited to congratulate her on her recent appointment as the new Director General of the DMO.

    Oniha said the decision was taken because there was no longer huge allocation to states at the end of monthly Federation Accounts Allocation Committee (FAAC) meetings “from where borrowed funds could be deducted, hence continuous exposure to new lines of borrowings may no longer be sustainable.”

    As a result, the component units of the Nigerian Federation have been advised to henceforth imbibe frugality and a new strategic way of fiscal plans and implementation

    Oniha lamented that it was unfortunate that oil mineral resources has continued to be the dominant contributor to the Federation Account.

    She however advising that States should “deploy new strategic thinking on how to address the financing of their already bloated debt stocks as well as how to generate funds to execute their plans aside from borrowings.”

    According to Oniha, “previously, we could rely on funds from FAAC and in addition to that we could borrow both at the Federal and at the State levels because there wasn’t a challenge. But I think the times have changed. Revenues are under severe pressures, we are still dependent on oil revenues, non-oil revenues are picking up, but that is still a journey.”

    She noted that what this “means  now, and in future, is that we need to do things so much differently, we must be more strategic in the management of public finance so the language I always use in my previous work where I was at the Efficiency Unit is that it’s no longer business as usual.”

    Oniha warned that “we can’t collect money from FAAC, borrow, continue and wait until the next month. So at various levels, we need to be more strategic and more creative in the things that we do.”

    At the Federal level Oniha said the federal government has “initiated several measures to increase non-oil revenue and control cost.”

    The DMO boss stated that “the law recognizes the States for being responsible for fiscal laws relating to the States, but we decided to partner with them in the belief that Nigeria is one project, hence we should not be looking at the center, we should be looking at the various tiers of governments.”

    As a result of the federal government’s big brother role, Oniha said the “what we did in that regards was to work with the various tiers of the states to have enabling laws , create their own debt managements and then help them work with them through training and other activities to create their own domestic debt data.”

    Regarding the states’ compliance to generating debt data, the DMO boss said “we have major challenges. At the DMO, we have done a lot with the states in terms of assisting in developing their debt data, passing debt laws leading to the establishment of Debt bureaux and so on. As we speak, we have a good understanding of the debt portfolios at the sub- national levels.”

     

     

  • FG to issue N135 bn bonds on July 12 – DMO

    FG to issue N135 bn bonds on July 12 – DMO

    The Federal Government plans to sell N135 billion worth of bonds in its July 12 auction, the Debt Management Office (DMO) has said.

    The offer circular, which was obtained from its website on Wednesday in Abuja, said it would sell N35 billion of bonds that would mature 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.

  • DMO’s Abraham Nwankwo bows out from office

    DMO’s Abraham Nwankwo bows out from office

    One of Nigeria’s longest serving public servant, Dr Abraham Nwankwo, Director General of Debt Management Office (DMO) will bow out from office on Friday after serving  for ten years. 
     
    Dr. Abraham Nwankwo was appointed Director-General of the Debt Management Office in 2007, having joined the services of the agency in 2001 as Assistant Director. In-between (July 2006 – July 2007), he had a stint at the Board of the World Bank where he served as Senior Advisor to the Executive Director (Africa Group II Constituency).
    One of the significant achievements of the Abraham Nwankwo reign at DMO was the conducting of Debt Sustainability Analysis on every State to decide whether or not to approve each request for new borrowing. The analysis led to  a drastic curtailment and mitigation of risk of over borrowing by the States.
     
    The Debt Sustainability Analysis initiative of the DMO formed part if the Sub-national Debt Management Initiatives and Achievements of the organization.
    The DMO under Nwankwo in its quest to ensure prudent management of resources and the adoption of sound public debt management practices at all levels of governance, developed a comprehensive programme for Sub-nationals which would enable them effectively determine their domestic debt stock and manage it as a matter of routine.

    The DMO also successfully marketed Nigeria’s FGN bonds which are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government.

    Before joining the Public Service, Nwakwo had worked in the banking and finance sector where he held top management positions; in Academics, as a lecturer in Economics at the University of Nigeria, Nsukka for about five years; as well as in journalism as an Economics Journalist with the New Breed Organization.

    He had all his University degrees from the University of Nigeria Nsukka: B.Sc. Economics (1980) – Winning the Prize for the best Economics degree; M.Sc. Economics (1983); and Ph.D. Economics (1985) – Winning the University Prize for outstanding Ph.D. research. He was the first Ph.D. graduate in Economics produced by the University of Nigeria, 25 years after the institution was established.

    In addition to numerous Publications in Academic Journals, he is also a creative writer. His published works in Literature and Economics include: “Minds of Time” (Poetry), “Tatu” (Drama) and “Oracles for Heroes” (Prose) – all published by Delta Publishers in 2004; “Through the Storm” (Drama) and “Stable Growth & Foreign Exchange” – both published by Evans Brothers in 2011.

  • FG offers two, three years savings bonds at 13.1%, 14.1%

    The Federal Government on Monday offered for subscription two-year savings bond at 13.18 per cent and three-year savings bond at 14.18 per cent, the Debt Management Office (DMO) has said.

    According to the offer circular derived from the DMO website, the two-year bond will be due in May 2019 while the three-year bond will be due in May 2020.

    It, however, did not state how much was offered, but added that the maximum subscription was N50 million at N1,000 per unit, subject to minimum subscription of N5,000 and in multiples of N1,000.

    The website said that the bond was fully backed by the full faith and credit of the Federal Government, with quarterly coupon payments to bondholders.

    The savings bond issuance is expected to help finance the nation’s budget deficit.

  • DMO lists FGN Savings Bond on NSE to service budget deficit

    DMO lists FGN Savings Bond on NSE to service budget deficit

    The Debt Management Office (DMO) on Wednesday listed series 1 of the Federal Government of Nigeria (FGN) Savings Bond worth N2.067 billion at N1,000 on the Nigerian Stock Exchange  (NSE).

    Dr Abraham Nwankwo,  DMO Director-General,  said in Lagos that the listing became imperative to guarantee liquidity of the bond.

    The News Agency of Nigeria (NAN) reports that the savings bond, the first of its kind in Nigeria was opened to the investing public by way of offer for subscription over a five-day offer period.

    The five-day period began on March 13, and would end on March 17, with N2. 067 billion raised from the retail market at 13.01 per cent coupon.

    Abraham stated that the bond would help to finance the nation’s budget deficit.

    According to him, the bond with subscription units of 2,577 will be issued monthly in tenors of two and three years, with quarterly payment of interest to investors.

    Nwankwo said that the response to the bond had been huge as individuals made enquiries with interest to participate in the bond.

    According to him, the bond will provide retail investors and ordinary Nigerians the opportunity to partake in infrastructural development of the country as well as generate good returns on their investments.

    “Over a year ago, the NSE mentioned the possibility of introducing retail bonds and we started working on it, with the team on NSE with the CBN, Securities and Exchange Commission and with other agencies that are relevant.

    “The FGN bond is meant for every Nigerian both at the grassroots as well as the common man.

    “The objectives of the bond had been achieved from the beginning as about 95 per cent of the subscriptions were from average individual Nigerians.

    “This means the grassroots’ common man dominate the FGN Saving Bonds,” Abraham stated.’’

    He said that the success showed that the initiative taken by the financial system and the NSE and other players in the market including stock broking community, had yielded fruits in terms of financial inclusiveness.

    The director-general commended all the stakeholders for the successful issuance of the first FGN Savings bond and urged Nigerians to be optimistic on the future of the nation’s economy.

    Also speaking, Mr Haruna Jalo-Waziri, NSE Executive Director, Capital Markets, said that the exchange was delighted with the savings bond listing which would mature in March 2019.

    Jalo-Waziri said that the bond among others would help to enhance the savings culture among Nigerians, while providing all citizens irrespective of income level an opportunity to contribute to national development.

    He stated that the FGN Savings Bond was safe and backed by the full faith and credit of the Federal Government of Nigeria, with quarterly coupon payments to bondholders.

    According to him, an interested investor needs to approach any of the accredited brokers and require only the sum of N5, 000 to subscribe with additions in multiple of N1, 000 subject to a maximum amount of N50 million.

    “We are pleased to list the series 1 of this innovative investment offering that caters to the retail segment of the Nigerian Capital Market.

    “The off take of the first tranche underpins the efforts of the Federal Government to continue to work with stakeholders to deepen the capital market while delivering value to investors at all income levels.

    “We look forward to continue the collaboration with DMO to list subsequent series of the Savings Bond”, Jalo-Waziri added.