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Tag: DMO

  • Fed Govt okays N195b for EEG debt settlement

    The Nigerian Export Promotion Council (NEPC) yesterday said the Ministry of Finance has directed the Debt Management Office (DMO) to make N195 billion available for  the settlement of Export Expansion Grant (EEG) debt.

    The debt covers backlog of 10 years from 2007 to 20016 for 270 companies.

    The Executive Director/CEO, NEPC, Olusegun Awolowo who spoke at a stakeholders forum on the framework for the issuance of promissory notes for the settlement of outstanding EEG claims (2007-2019), said the payment will bring succour to the export sector in particular and the economy in general.

    He said there is also a positive signal from the National Assembly as it will soon pass the second batch of approval for the remaining 39 companies with a total value of about N124 billion.

    According to him, the settlement of the  debt by the government will pave way for the revival of the non-oil export sector of the economy, adding that it will in no small measure enable financial institutions, inject funds for further export activities, generate more foreign exchange as well as employment for the teeming youths of the country.

    Awolowo said: “Statistics from the pre-shipment inspection agents and the National Bureau of Statistics analysed by the Council showed that, the country’s export earnings for 2017 and 2018 experienced an upward trend. There was a growth of 48.43 per cent from $1.204billion in 2016 to $1.787billion in 2017; it further went up by 27.22 per cent equivalent to $2.274billion in 2018. It is our sincere believe that exports for 2019 will grow by about 40 percent in view of the settlement of the exporter’s debt through the promissory note programme.”

    He said in line with government policy on  Ease of Doing Business and in order to complement these efforts, the NEPC has developed an online, real time portal for the processing and management of EEG claims.

  • PDP calls on N/Assembly to probe FG’s N24.3 trn debt profile

    The Peoples Democratic Party (PDP) has raised questions over Federal Government’s “unwholesome” borrowings amounting to N24.38 trillion debts, from 2015 debt stock of N12.12 trillion.

    Revelations on the government’s current debt profile were contained in a report released by the Debt Management Office (DMO) last week, prompting the PDP to call on the National Assembly to investigate how the monies were spent.

    In a statement Monday by the spokesman for the PDP, Kola Ologbondiyan, the main opposition party blamed the Buhari administration for what it described as saddening and devastating debt overhang on the nation.

    According to the PDP, the rising debt profile was a product of the government’s manifest incompetence and lack of initiative to stimulate and run a productive economy.

    It blamed the administration for its reliance on heavy borrowings and unbearable tax regimes, which the party said have crippled productivity, caused untold hardship and mortgaged the economic future of the nation.

    The PDP said there has been a culture of unexplained borrowings leading to a steep rise in the debt stock from N17.5 trillion in 2016 to N21.72 trillion 2017, rising to N24.387 trillion in 2018.

    The PDP said, “It is shocking and completely insupportable that our nation’s debt had risen from N21.72 trillion in December 2017 to N24.387 trillion in December 2018, showing an accumulation of a whopping N2.66 trillion in a space of one year.

    Read also: PDP blackmailing Supreme Court, APC alleges

    “President Muhammadu Buhari-led administration, therefore, has a huge explanation to make to Nigerians for its borrowing spree, especially as it cannot point to any meaningful development project into which the borrowed funds were invested.

    “This is particularly against the backdrop of allegations in the public space that the borrowed funds, which were taken as development funds, were diverted to 2019 general elections campaign activities of the All Progressives Congress (APC), a huge part of which ended in private pockets of corrupt APC leaders.

    “This is in addition to direct frittering of public funds through the alleged N1.4 trillion sleazy oil subsidy regime, the looted N9 trillion detailed in the leaked NNPC memo, the alleged N33 billion fraud in the handling of funds meant for the welfare of Internally Displaced Persons (IDPs) in the North East, among other sleazes”.

    The party called on the National Assembly to commence a system-wide investigation into the borrowings by the administration, particularly the terms of the borrowing and the handling of the funds.

    It charged the federal legislature to save the future of the nation by restricting the Buhari administration from taking further loans on behalf of the country until explanations are provided on the terms and handling of the borrowed funds.

    “Nigerians cannot afford to continue to bear the burden of an incompetent and insensitive administration and that is why they eagerly await the retrieval of our stolen mandate at the presidential election petition tribunal”, the statement added.

     

  • March 2019 FGN bond auction oversubscribed

     The FGN Bond Auction for March 2019 conducted by the Debt Management Office (DMO) on Wednesday, March 27, 2019, at which N100 billion Bonds were offered, was oversubscribed just as in the Auctions for January and February 2019.

    A statement from the DMO said it “offered three instruments at the Auction for 3, 7 and 10-year tenors and subscriptions for the three instruments was in excess of N148 billion for competitive bids.”

    The statement added: “Non-competitive bids valued at N92.6 billion were also received, taking the total subscriptions across the 3 tenors to over N240.6 billion.

    Read also: Investors bid N234bn for N150bn bonds offer — DMO

    “The trend of investors’ preference for the longer tenured instrument continued with the 10-year bond significantly oversubscribed with a bid-to-cover ratio above 5” the DMO said.

    Allotments were made to successful bidders at the rates of 13.5% for the 5-year, 13.5% for the 7-year and 13.5% for the 10-year bonds, which are considerably lower than the allotment rates for the February 2019 Auction.

    “The total amount allotted to both competitive and non-competitive bids for the three instruments was N121.95 billion,” the statement said.

  • DMO: N100b Sukuk Bond to sustain rehabilitation

    The second issue of the N100 billion Sukuk Fund is aimed at sustaining the 25 key roads in the six-geopolitical zones, the Debt Management Office (DMO) Director-General, Patience Oniha, has said.

    He spoke at the sovereign Sukuk public offer-investor forum in Lagos.

    According to Oniha, the success of the first N100 billion Sukuk Bond issue in 2017 was as a result of the clearer understanding of the financial market, as well as investors, which is arousing the interest of many.

    She recalled that that year, the Sukuk Bond, which recorded 5.8 per cent over-subscription, helped in executing road projects across all the regions of the country, noting that the public’s response to the offer has further affirmed investors’ confidence and created jobs.

    The FBNQuest Merchant Bank Limited Deputy Managing Director, Taiwo Okeowo, expressed delight in participating in the initiative, because it would contribute to narrowing the country’s infrastructure deficit.

    The impact of the Sukuk Bond still reverberates across the country. For instance, the House Committee on Works attested to the impact the Bond has had on critical infrastructure, especially in helping the federal government to mobilise a lot of contractors handling various governments’ projects back to site.

    The committee Chairman, Ali Wudil, while on tour of some projects mostly executed with the Sukuk Bond in Kano State, revealed that most of projects had been abandoned for years, but that the Sukuk Bond had mobilised the contractors back to site.

    “Works are on-going in most of the areas we visited and this is possible because of the Sukuk Bond. Some of these projects were started since 2006 and are not yet completed due to unavailability of funds, which has resulted to review upon review of the projects and you know what that entails. Nevertheless, at committee level, we are satisfied with the level attained and the quality of the jobs being executed,” Wudil said.

    Dantata and Sawoe Project Manager Roy Hungushi, who’s firm is handling the Kano Western By-pass, told the committee that the 26.6-km road awarded since 2007 for N13.2 billion has  escalated to N22 billion due to lack of funds, thereby necessitating the reviews. He said with the Sukuk enabled funding by the government, the company was able to return to site, assuring that with adequate funding, the project would be completed in good time.

    Proceed from the Sukuk Bond II will be used for road projects. For instance, in the Southwest, the bond is to be used for reconstructing Benin-Ofosu-Ore-Ajebandele-Shagamu dual carriageway (Phase 3 and dualisating Ibadan-Ilorin road (Section 2).

    Three roads were identified in Southsouth.  They include the rehabilitation of Enugu-Port Harcourt road, dualisation of Yenagwa road junction-Kolo-Otuoke Bayelsa Palm and that of Lokoja-Benin road (Section 2-4).

    In the Southeast, Onitsha-Enugu Expressway and the Enugu-Port Harcourt road (Section 1-3) would be rehabilitated. While in Northcentral, Loko Oweto Bridge would dualised, Abuja-Lokoja road (Section 1 and 4), Suleja-Minna road (Phase 2) and Lokoja-Benin road (Section 1) would be dualised.

    In the Northeast, Kano-Maiduguri road (Section 2-5), , northwest, Kano-Maiduguri road (Section), Kano-Kastina road (Phase 1) would be also be dualised and  Kano Western bypass and Kaduna Eastern bypass would be constructed.

    Subscribers can purchase N1,000 per unit subject to a minimum subscription of N10,000 and in multiple of N1,000 with FBNQuest. Islamic Wealth Manager, Lotus Capital, manages the sales.

     

  • NNPC engages DMO, ministry to avert depots shutdown

    The Nigerian National Petroleum Corporation (NNPC), yesterday began engagement with the Federal Ministry of Finance, Debt Management Office (DMO), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA and Independent Petroleum Products Importers (IPPI) to avert the shutdown of petrol depots across the country.

    It was learnt from the Group General Manager, Group Public Affairs Division of the corporation, Ndu Ughamadu that there is assurance the issues will b e resolved amicably soon

    The NNPC spokesman, in a text message, said there was no cause for alarm, saying the corporation has sufficient stock level.

    The message reads in part: “NNPC is engaging marketers bodies, Federal Ministry of Finance and DMO on the issue. Going by the positive outcomes, so far, we are optimistic of a prompt resolution of the contending matter.

    “No cause for worries. We have a robust fuel stock and high fuel sufficiency. Consumers should not panic.”

    The marketers had on Sunday in Lagos given the government a seven-day ultimatum to pay them the outstanding N800billion debt of fuel subsidy claim.

    They warned the government that its failure to settle the debt would result in the withdrawal of their staff and closure of their depots.

    It would be recalled that the marketers had this same time last year created an artificial fuel scarcity that resulted in arbitrary high in pump prices of the Premium Motor Spirit (PMS) all over the country.

    The scarcity lingered till about December 23 before the marketers opened up that the Federal Government was owing them N800billion for supplying petrol under the fuel petrol subsidy regime.

    Initially the government denied owing them and later settled the matter after several meetings.

  • DMO: CBN didn’t increase rates to attract investors

    The Debt Management Office (DMO) has dismissed claims that the Central Bank of Nigeria (CBN) ‘increased’ rates to ‘attract’ investors at the Nigeria Treasury Bill (NTB) auction.

    The debt office also denied insinuations that the higher interest rates on NTB are due to fears of capital flight ahead of the 2019 general election.

    It said sinceforeign investors still participate in the domestic fixed income securities markets, it  is wrong to attribute the Auction Rate to fears about capital flight. To buttress this point, Interest Rates on NTBs in the first half of 2017 were much higher than the present rates, at a time when there was no election approaching”.

    Shedding more light on how NTB interest rates are derived, the statement said “investors bid at the NTBs Auction at their own Interest Rates, thus the Rates on NTBs are not predetermined or determined by the CBN or the DMO. The Rates at which the investors bid is entirely at their discretion, but will typically depend on prevailing secondary market rates, their portfolio needs and investment preferences.”

    It added that “in allotting to bidders oftentimes, the DMO and CBN will also be guided by similar factors and the implications for markets and macroeconomic stability. Taking into account all these factors, the Interest Rates at the Auctions will ultimately be determined by demand and supply.”

    NTBs are the Federal Government of Nigeria’s short-term debt instruments issued regularly by the DMO through the Central Bank of Nigeria (CBN), which in this instance, is the DMO’s agent.

  • Governor to DMO, others: publish Ekiti’s debt profile

    Ekiti State Governor Ayodele Fayose has challenged the Debt Management Office (DMO), commercial banks and the All Progressives Congress (APC) to publish any debt he owes since coming to power.

    Contrary to the claims of the opposition, Fayose insisted that he had not committed the state to any debt through bonds from the capital market or loans from commercial banks.

    Addressing reporters yesterday at the Governor’s Office in Ado-Ekiti, the state capital, the governor justified the purchase of a N75 million Lexus Sport Utility Vehicle (SUV) for himself as a “parting gift”.

    Reacting to the claim of the Transition Committee set up by Governor-elect Dr Kayode Fayemi that the records at the DMO showed Ekiti debt profile under him ballooned to N117 million, Fayose said the allegation was a “cheap blackmail and lie from the pit of hell”.

    Fayose said: “When Fayemi was leaving as governor in 2014, he left with in a car and so did other governors before him. So, you can’t expect me also not to have a befitting car when I am leaving office.

    “Fayemi himself ordered a Jeep of almost N7 million for me when I was still governor-elect in 2014, but he didn’t pay for it. I had also bought a Jeep for former Governor Niyi Adebayo to honour him. That is how it is done every four years.

    “If Fayemi’s government wants to probe me, I will present myself and will not behave like a coward, like he did. I have served Ekiti, l have given my best. Relevant documents will be handed over to the incoming administration at the appropriate time.

    “I have not committed Ekiti to one naira since I assumed office as governor for the second term. I haven’t borrowed from any financial institution.

    “They should stop saying it and publish any record of debt from any bank or the Debt Management Office (DMO) as evidence. I did not borrow, take any bond or borrow from any financial bank.

    “In my first tenure, I left N10.4 billion in the covers of government, but I started this administration on October 16, 2014, meeting a huge debt incurred by my predecessor, John Kayode Fayemi.

    “The last administration of Fayemj brought Ekiti to N25 billion bond and N32 billion commercial loan and the state will pay the bond until year 2022. The commercial loan was restructured, like it was done for other states.”

  • DMO assures on Nigeria’s borrowing from China

    • ‘No reason to panic’

    The Debt Management Office (DMO) has assured the public that Nigeria’s public debt is being managed under statutory provisions and international best practice, and there is no risk of default on any loan, including the Chinese loans.

    It said claims of a possible seizure of national assets by the Chinese government are unfounded, saying “the possibility of a takeover of assets by a lender does not exist,” pointing out that “government’s borrowing in the Domestic and External markets, including Chinese loans are all backed by the full faith and credit of the government, rather than a pledge of the government’s assets.”

    Borrowing from China, the DMO emphasised, “should not be seen from a negative perspective as they are being used to finance Nigeria’s infrastructural development at concessional terms. Moreover, China Exim Loans are only one of the sources of multilateral and bilateral loans accessed by Nigeria and represented only about 8.5% of Nigeria’s External Debt as at June 30, 2018.”

    Government’s borrowing from China the DMO said “is based on need, and subject to the receipt of requisite approvals, the Government may raise capital from several Domestic and External sources to finance capital projects, in order to promote economic growth and development, as well as, job creation.”

    One of the reasons why Nigeria would raise capital from Multilateral and Bilateral sources, the DMO noted “is because they are Concessional which means that they are cheaper in terms of costs, and more convenient to service because they are usually of long tenors with grace periods.”

    Prudent management of the public debt the nation’s debt managers said “implies that, the Government should avail itself of the opportunity to access concessional loans which deliver twin benefits of being more cost efficient and supporting infrastructural development.”

    Loans from Concessional Lenders have limits in terms of the amounts that they can provide to each country. This makes it necessary for Nigeria to have several sources for accessing concessional capital to increase the total amount available and also, to avoid undue dependence on only a few sources of concessional funds.

    The DMO added that “borrowing from China Exim is one of such means of ensuring that Nigeria has access to more long term concessional loans. Given the country’s infrastructure deficit, which needs to be urgently addressed, the loans from China Exim, which provide financing for critical infrastructure in Road and Rail Transport, Aviation, Water, Agriculture and Power at concessional terms, are appropriate for Nigeria’s financing needs and align properly with the country’s Debt Management Strategy.”

    Nigeria’s Public Debt the statement said “remains sustainable and there is also no risk of default because of Nigeria’s sound Debt Management practices.”

    Following the recent summit of the Forum on China-Africa Cooperation  (FOCAC) Nigeria secured a facility for the National Information and Communication Technology Infrastructure Backbone Phase 11 (NICTIB 11) between Galaxy Backbone Limited of Nigeria and Huawei Technologies Limited (HUAWEI) of China at the cost of US $328 million. The facility is provided by the Chinese EXIM Bank.

    The DMO insisted that with regards to external borrowing, the Nigerian Government accesses capital from several sources –  Multilaterals, such as the World Bank and the African Development Bank, as well as, Bilateral loans from various countries such as France (through the Agence Francaise de Development -AFD), Germany (KfW), Japan (Japan International Cooperation Agency – JICA), India (India Development Bank) and China (China Export-Import Bank – EXIM). These loans from Multilateral and Bilateral lenders are typically used to finance specific capital projects across the country. The International Capital Market is another source of capital.

  • $500m Chinese loan: No reason to panic, says DMO

    The Debt Management Office (DMO) has reassured the Nigerians that there is no risk of default on the 500 million US dollars loan expected from China.

    The department gave the reassurance in a statement on Tuesday in Abuja.

    DMO’s statement is in reaction to public concern following the announcement at the Forum on China-Africa Cooperation summit that Nigeria had signed a 500 million US dollar loan facility with the China Exim Bank.

    The department said that the loan would be used to finance road and rail transport, aviation, water, agriculture and power projects.

    It said that the terms of the loan were appropriate for the country’s financing needs and aligned with her debt management strategy.

    “The public should be assured that Nigeria’s public debt is being managed under statutory provisions and international best practices, and there is no risk of default on any loan, including the Chinese loans.

    “Thus, the possibility of a takeover of assets by a lender does not exist.

    “For the avoidance of doubt, government’s borrowing in the domestic and external markets, including Chinese loans, are all backed by the full faith and credit of government, rather than a pledge of government’s assets.

    “Finally, borrowing from China should not be seen from a negative perspective as they are being used to finance Nigeria’s infrastructural development at concessional terms,’’ DMO said. (NAN)

  • Fed Govt, states debts hit $22b

    •DMO lists who owes what

    The Debt Management Office (DMO), yesterday put Nigeria’s external debt stock at $22billion. Out of the amount, the Federal Government’s quotient is $17.8 billion, while the combined debt portfolio by the states and the Federal Capital Territory (FCT) stands at $4.28 billion.

    Of the combined states’ figure, Lagos State, the commercial nerve-centre of Nigeria, has the highest foreign portfolio of $1.45 billion, or 33.88 per cent of the states’ debts.

    The debt status from the DMO, the News Agency of Nigeria said, were as a June 30, 2018. Going by the data, the Federal Government accounts for 81 per cent of the country’s external debt, while the states and the FCT account for 19 per cent.

    Following Lagos in that sequence is Edo State which stands at a distant second with external debt of $279 million.

    Others are Kaduna, $232.9 million; Cross River, $193.7 million; Bauchi, $134.9 million and Enugu, $127.9 million.

    The DMO listed other debtor states as Anambra which is owing $107.4 million; Oyo, $106.34 million; Ogun, $105.3 million; Osun, $101.5 million and Abia, $100.2 million.

    Others are Ekiti with a debt overhang of $97.9 million; Ondo $81.4 million; Rivers, $79.5 million; Ebonyi, $67.9 million; Kano, $65 million; Katsina, $64.7 million and Delta, $63.8 million.

    The DMO said Imo incurred a debt of $61.2 million; Nassarawa, $61.4 million; Adamawa, $57.8 million; Niger, $55.7 million; and Bayelsa $57.2 million. Also in the foreign debt conundrum are Akwa Ibom with $48.3 million; Kebbi, $46.7 million; Kwara, $49.8 million and Sokoto $40.2 million.

    At the tail end of the debt profile are Taraba, with $22.1 million; Borno, $22.2 million; Yobe, with $28.4 million and Plateau with $29.6 million.

    Others are Kogi, with 32.37 million dollars; Jigawa, 32.80 million dollars; FCT, 32.83 million dollars; Zamfara, 34.2 million dollars; Benue, 34.7 million dollars and Gombe, 38.5 million dollars.

    The Director-General of DMO, Ms. Patience Oniha,  said as at June 30, the nation’s public debt stock increased marginally by 3.01 per cent from that of December, 2017.

    “One of the beneficial outcomes is the rebalancing of the debt stock, the ratio of domestic debt to external debt inching towards the target of 60:40 and the target of 75:25 between long term domestic debt and short term domestic debt.

    According to the figures for June 30 released by the DMO, the ratio between domestic and external debt stood at 70 to 30 compared to 73 to 27 in December, 2017.

    Ms.Oniha said the ratio of 60 to 40 was important to ensure that the nation was not 100 per cent indebted externally, and that it was also easier to raise money domestically.

    She said the Federal Government has been borrowing from the external debt market to refinance maturing local debts because of the lower interest rates obtainable from foreign sources