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Tag: DMO

  • Lagos retains highest foreign debt portfolio – DMO

    Lagos State, the commercial nerve-center of Nigeria, has retained its position as the state with the highest foreign debt in the country, with a foreign debt put at 1.45 billion dollars as at June 30.

    A document obtained from the Debt Management Office (DMO), on Wednesday in Abuja, titled: ‘States, Federal Capital Territory (FCT) and Federal Governments’ External Debt Stock as at June 30, 2018,’ also detailed other states’ external debts.

    The document also stated that the external debt stock of the entire nation stood at 22 billion dollars with the Federal Government incurring 17.8 billion dollars, while the states and the FCT owed 4.28 billion dollars.

    This means that 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.

    As at Dec. 31, 2017, Lagos State also had the highest foreign debt portfolio 1.47 billion dollars, but the figure reduced to 1.45 billion dollars by June 30.

    Following Lagos in a distant second is Edo, which incurred 279 million dollars.

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

    Read Also:No cause for alarm over Nigeria’s N22.7t debt profile’

    According to the DMO, other top debtors are Anambra owing 107.4 million dollars; Oyo, 106.34 million dollars; Ogun, 105.3 million dollars; Osun, 101.5 million dollars and Abia with 100.2 million dollars.

    Following closely are Ekiti with 97.9 million dollars; Ondo with 81.4 million dollars; Rivers, 79.5 million dollars; Ebonyi, 67.9 million dollars; Kano, 65 million dollars; Katsina, 64.7 million dollar and Delta, 63.8 million dollars.

    The statement also revealed that Imo incurred 61.2 million dollars; Nassarawa, 61.4 million dollars; Adamawa, 57.8 million dollars; Niger, 55.7 million dollars; and Bayelsa with 57.2 million dollars.

    Others are Akwa Ibom with 48.3 million dollars; Kebbi, 46.7 million dollars; Kwara, 49.8 million dollars and Sokoto with 40.2 million dollars.

    States with the lowest debt portfolio include Taraba, with 22.1 million dollars; Borno, 22.2 million dollars; Yobe, with 28.4 million dollars and Plateau with 29.6 million dollars.

    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, had at a media conference on Aug. 14, said as at June 30, the nation’s public debt stock increased marginally by 3.01 per cent from that of Dec. 2017.

    “One of the beneficial outcomes is the re-balancing 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 Dec. 2017.

    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.

    Oniha also said the Federal Government had been borrowing from the external debt market to refinance maturing local debts because of the lower interest rates obtainable from foreign sources.

  • DMO: Nigeria’s debt rises to N22.4tr in six months

    The Director-General, Debt Management Office (DMO), Patience Oniha, yesterday in Abuja, said Nigeria’s debt stock rose to N22.4trillion at the end of June this year, marking a three per cent increase from the N21.68 trillion recorded at end of December last year.

    According to her, the rise in total debt stock was recorded after the Federal Government issued a $2.5 billion Eurobond in February.

    The DMO chief had said the Eurobond issuance—the fifth in the history of Nigeria—will not affect debt level.

    “I am particularly pleased that the issuance will enable us to refinance a portion of our existing domestic debt portfolio, with external debt at considerably lower cost, but also that the impact of the process has already led to a reduction in the cost of domestic borrowing, and so a double benefit for the cost of our broader debt portfolio. Lower domestic rates will also benefit corporate borrowers,” Oniha had said.

    But speaking on the nation’s debt ratio target during the briefing, Oniha said a 40 per cent foreign and 60 per cent domestic debt mix was being planned by government.

    She said government reduced the interest paid to raise domestic debt, instead of rolling it over as previously done, thereby offsetting about N840 billion worth of local treasury bills in the first half of this year.

    She said there are plans to issue N850 billion worth bonds offshore before the end of 2018, pending approval of the National Assembly.

  • DMO raises N66.9b at bond auction

    The Federal Government raised N66.9 billion at its bond auction yesterday, as part of moves to finance the 2018 budget.

    The Debt Management Office (DMO) said on its website that the bonds were auctioned in three tenors of five, seven and 10 years.

    This, it said, was to give its diverse investor base an opportunity to choose their preferred tenors.

    It said investors showed a strong preference for the 10-year bond with a total subscription of N50.51 billion compared to the N40 billion that was offered.

    However, N46.39 billion was allotted.

    “The Federal Government bonds at the auction were allotted at 13.69 per cent for the five-year, 14 per cent for the seven-year and 14.2 per cent for the 10-year bond.”

    According to the auction results posted on the website, DMO stated that out of the N25 billion  offered for the five year bond,  subscriptions to the value of N12.93 billion was received, while N8.93 billion was allotted.

    It also said for the seven year paper,  N13.58 billion subscriptions were received for the N25 billion on offer. However, N11.58 billion was allotted.

    Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

  • DMO eyes N208b Green Bond before year-end

    The Debt Management Office (DMO) is planning a green bond programme before the end of the year to raise funds for environmental projects, a junior minister for the environment said at the weekend.

    Ibrahim Jibril said the capital market could see issues of around N208 billion ($682 million) this year to fund projects to reduce carbon emissions. The ministry said the total figure was not fixed and would depend on an evaluation of the projects that need funding.

    “Before the year runs out, the DMO will come up with a programme where we will come to the market for another issue,” Jibril told reporters at the listing of its debut green bond on the Nigerian Stock Exchange (NSE).

    Nigeria has been exploring options to fund its successive record budgets, especially after an oil price collapse in the late 2014 that triggered a recession two years later. The economy has since recovered, but growth is still fragile.

    The environment ministry has said a bond programme for environmental projects is part of the government’s aim to align with a global objective of expanding the market for finance for efforts to fight climate change.

    Last year, the country issued a maiden N10.69 billion green bond with a five-year tenor to fund projects to develop renewable energy. It was listed on Friday for secondary trading.

     

  • DMO: Nigeria has debt management strategy

    The Debt Management Office (DMO) has said Nigeria has a duly approved Debt Management Strategy (DMS).

    In a statement issued in Abuja yesterday, DMO said the DMS was approved by the Federal Executive Council (FEC) in June 2013 and has an expiry date of December 2019.

    The DMS, the statement said, is different from the agency’s Strategic Plan which is an institutional plan of DMO’s “goals and objectives as well as, the activities that will enable their achievements. It covers issues such as human resources, technology, and market development amongst others.”

    The Public Debt Management Strategy on the other hand “is entirely about the strategies for managing the public debt to ensure that borrowing is prudent and the public debt is sustainable.”

    DMO assured Nigerians that a duly approved DMS which runs till December 2019 is still in force and it’s being implemented fully.

    “A  new Strategic Plan that will deliver a new, robust and all encompassing strategy is at the final stage. A robust Strategic Plan became necessary due to developments in the macro-economy, the ERGP and the need to come up with creative ways to fund the government in the face of lower revenues.”

  • FG must take loans to fund budget – DMO

    The Director-General of Debt Management Office (DMO), Patience Oniha, said on Monday the Federal Government must take loans to fund the budget and capital projects.

    Nigeria’s total public debt stock stands at N21.73 trillion as at the end of December 31 last year.

    Oniha spoke at the International Monetary Fund (IMF) Regional Economic Outlook for Africa with theme: “Domestic Revenue Mobilisation and Private Investment.”

    She said with the level of reserves, oil production and population, Nigeria cannot claim to be an oil producing nation like Saudi Arabia.

    “We have since realised we should not be benchmarking ourselves against these countries. We borrow because there is revenue shortfall. The National Assembly passed the budget last week and we know it was higher than what the executive presented. So, as a debt manager, what I am looking for is to see where the funding of that incremental size may come in from.”

    According to the DMO chief, federal government would take loans to make up for that shortfall in budget.

    “All of government’s borrowings were targeted at infrastructural development. Without borrowing, we won’t be able to deliver on the budget and I think we should be clear about that and a lot of that went into capital projects,” she added.

     

  • $2.5bn Eurobond to lower government cost – DMO

    $2.5bn Eurobond to lower government cost – DMO

    A proposed $2.5 billion Eurobond to refinance some of Nigeria’s treasury bill portfolio will not increase its overall debt stock but helps to lower cost, the Debt Management Office (DMO) said on Friday.

    The DMO said in a statement that proceeds from the bond sale would be converted to naira and used to redeem a more expensive local debt, thereby improving the government’s debt service ratio.

    The Minister of Finance, Kemi Adeosun, had said on Wednesday that the country plans to redeem N762.5 billion worth of treasury bills and that it would save government N64 billion each year after the refinancing is completed.

    In January, the Director- General of the DMO, Patience Oniha, told Reuters the government would consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost.

    Nigeria wants to refinance $3 billion worth of a local treasury bill portfolio of N2.7 trillion.

    Eurobonds make up more than a fifth of Nigeria’s $15.35 billion foreign debt portfolio as of September 2017 and more than half of interest paid in the third quarter.

    Total domestic debt stood at N15.68 trillion by September.

  • DMO raises N215b from FGN Bonds

    The Debt Management Office (DMO) has raised N215 billion from the Federal Government of Nigeria (FGN) first monthly auction for the year.

    A report from FBN Capital, an investment and research arm of FBN Holdings, said the funds came at relatively high rates. It said although the debt office is once again running its auction programme without an approved FGN budget in place, it is in a more comfortable place than 12 months ago.

    “The marginal rates last week were slightly higher than the previous month: 13.38 per cent and 13.49 per cent for the five and 10-year benchmarks for July 2021 and March 2027 offers, compared with 13.19 per cent and 13.21 per cent,” it added.

    “In January 2017, the DMO raised N215 billion from the first monthly auction of FGN bonds of the year. Last week’s equivalent auction raised its target of N110 billion,” it said.

    The FBN Capital report, titled “Decent start to the year for the DMO”, explained that since the offers, there had been positive feedback from the market. It said there were indications that the FGN may raise another $2.5 billion from the sale of Eurobonds this quarter, and that the DMO would have a conversation with JP Morgan about the return of a selection of its FGN bonds to the bank’s indices for government issues in local currencies in emerging markets.

    Naira securities were removed from the JP Morgan Index in 2015 because of foreign-currency shortages, which led to volatility in the market. JP Morgan is the largest bank in the United States, the world’s sixth largest bank by total assets, with total assets of $2.5 trillion, and $28 trillion in assets under custody and administration.

    The report said decline in yields on FGN paper in the past four months amounted to plus or minus 350basis points for the bonds, which it argued may not be reflected in the 2018 budget proposals, which have total debt service at N2.03 trillion, excluding the sinking fund. “We have estimated the average cost of FGN borrowing in naira last year at 15.5 per cent, based upon debt service for the first nine months.”

    In addition to the momentum in its favour, the DMO appears to have a lower funding target for this  year. It raised N1.25 trillion net from the domestic market last year whereas the FGN deficit in the 2018 proposals is said to be N2 trillion and the strategy is to shift the balance towards external borrowing.

    Also, the DMO’s new calendar for first quarter of the year stated that investors would be offered two new issues, February 2028s next month and March 2025s at the auction in March. Its calendars are released after consultations with the investor base.

    JP Morgan Chase & Co plans to expand its African presence into countries, including Ghana and Kenya, Chief Executive Jamie Dimon said. “You will see us open in some countries we are not in, in Africa you will be hearing about some of that stuff,” Dimon said at last year’s World Economic Forum meeting in Davos, Switzerland.

     

  • Green Bond subscriptions hit N10.79b

    Green Bond subscriptions hit N10.79b

    Subscriptions for the Sovereign Green Bond stood at N10.791 billion at the close of the offer, the Debt Management Office (DMO), said yesterday.

    It said the amount received from the offer was higher than the N10.69 billion offered. The offer was oversubscribed. Among the investors were banks, pension funds, asset managers and retail investors.

    The DMO had offered N10.69 billion Sovereign Green Bond for a tenor of five years and coupon of 13.48 per cent.

    “The DMO is pleased with the strong interest shown by Investors, and added that it shows investors interest in new products and support for the objective behind the issuance of Bond which is to invest in projects that will contribute to preserving the environment. It also shows support for the Paris Agreement on the Climate, which Nigeria has endorsed,” the DMO said.

    The Green Bond, which was rated ‘Excellent’ by Moody’s, was issued as part of the Federal Government’s New Domestic Borrowing in the 2017 Appropriation Act to finance three projects.

    The projects are Energising Education Programme, Renewable Energy Micro Utilities and Afforestation Programme.

    The DMO expressed its commitment to providing products that meet the needs of investors for their portfolio preferences and to continue to promote financial inclusion.

  • DMO begins investors’ campaign for N10.96b Green Bond

    DMO begins investors’ campaign for N10.96b Green Bond

    The Debt Management Office (DMO) has started  a sensitisation roadshow in Abuja for the N10.96 billion Sovereign Green Bond issuance.

    The Green Bond, which will be issued on Monday,   followed  Nigeria’s endorsement of the Paris Agreement on Climate Change on September 21, 2016.

    The Paris Agreement aims to strengthen the global response to the threat of Climate Change, since the signing of the Agreement various countries who are parties to the Agreement have initiated several steps aimed at making the environment better.

    Speaking yesterday in Abuja, DMO Director-General, Patience Oniha, said the roadshow will continue in Lagos today and would sensitise prospective investors in the Green Bond.

    She explained that the essence of the roadshow is to ensure that the people or organisations who will invest in the Green Bond have some understanding of what the project is about.

    Oniha noted that the government will use the Green Bond proceeds to finance projects in the 2017 Appropriation Act that have been certified as Green because of their positive effects on the environment.

    She said proceeds from the green bonds will be used to finance the Renewable Energy Micro Utilities and Afforestation Programmes.

    Also speaking, Hajiya Halima Abubakar, a representative of the Department of Climate Change, Federal Ministry of Finance, explained that Nigeria is prone to coastal environmental hazards which were part of reasons President Muhammadu Buhari signed the Paris Agreement for a global response to environmental challenges facing the nation.