The Nation Newspaper

Tag: DMO

  • Nigeria to issue first Diaspora bond, says DMO

    Nigeria to issue first Diaspora bond, says DMO

    The Debt Management Office (DMO) yesterday announced the commencement of a global offering of Nigeria’s first Diaspora Bond.

    DMO made this known in a statement, the News Agency of Nigeria, said on its website. It said the nation has filed a registration statement for the bonds with the U. S. Securities and Exchange Commission.

    It said the application would be made for the bonds to be admitted to the official list of the UK Listing Authority and the London Stock Exchange Plc.

    The office said this was to ensure that the bonds were admitted to trading on the London Stock Exchange’s regulated market.

    “The bonds will be direct general obligations of Nigeria and will be denominated in U.S. dollars.

    “The international Joint Lead Managers are Bank of America Merrill Lynch and The Standard Bank of South Africa Ltd.

    “The Nigerian Joint Lead Managers are First Bank of Nigeria Limited. and United Bank for Africa Plc,” it said.

    It said there would be a series of investor meetings in the UK, the U. S. and Switzerland from June 13.

    The office said that pricing was expected to occur following the investor meetings and subject to market conditions.

    It said that Diaspora bond was used to raise funds from Nigerians in the Diaspora to finance capital projects and provide an opportunity for them to participate in the development of the country.

  • DMO takes FGN Savings Bond campaign to Ibadan

    The Debt Management Office (DMO) has taken the Federal Government of Nigeria Savings Bond (FGNSB) campaign to Ibadan, the Oyo State capital.

    The one-day sensitisation was attended by trade union leaders and associations in the Southwest.

    The DMO said Nigerians could subscribe through stockbroking firms at the Nigeria Stock Exchange and its accredited agents.

    DMO’s Director-General Dr. Abraham Nwankwo said the bond would empower Nigerians  and that it was to provide opportunity for investors to contribute to national development and boost the saving culture.

    Nwankwo, who noted that DMO has a board chaired by the Vice President, explained that Nigerians could invest a minimum of N5,000 and maximum of N50 million in the FGNSB.

    He also explained that any amount higher than N50 million should be invested in the old bond, – the Federal Government of Nigeria Bond (FGNB).

    “We are in Ibadan to enlighten the public about the Federal Government of Nigeria Savings Bond. The government of Muhammadu Buhari has an economic philosophy of making sure that the economic process is inclusive. As Nigeria recovers from economic recession and grows, nobody should be left behind. Every Nigerian, no matter their income level, will have an opportunity to participate in re-activating the economy, and also benefit from the progress that is being made.

    “The DMO has been mandated by Acting President Yemi Osinbajo to ensure that it works along this mandate. The Federal Government  has been issuing bonds since 2002  to ensure that the government raises additional money to augment revenue to fund various capital projects in the budget. The budget is approved by the National Assembly,” Nwankwo said.

    He explained that funds are borowed from both internal and  external sources to fund the budget.

    “However, based on the new philosophy of the government, that whatever we are doing should be inclusive, so that when we achieve growth, it will be growth with development because everybody is involved. We have decided to design a new instrument – FGN Savings Bond- which can be accessed by the low income group, such as teachers, artisans, drivers, tomato sellers, market women, plumbers, trade unions and  others.

    “On a personal level, you will benefit because you will be earning assured and competitive interest rate every quarter. The FGN Savings Bond is offered every month.  The DMO has been given the mandate.

    The Minister of Finance, Mrs. Kemi Adeosun, has given us all the support to make sure that we are able to reach Nigerians everywhere. We have been to Kano and Onitsha. We are also in Ibadan. We will continue with other cities. We will go to the local governments and villages.

    He said in few weeks, publicity would be on radio stations in  indigenous languages, so that all the grassroots would be mobilised to to save and earn income for various purposes, such as building a house, paying school fees in the future, and carry out other projects.

    “More importantly, the government is insisting that every economic activity supported by government should be available and accessible to all Nigerians, irrespective of their income level,” he added.

  • FGN Savings Bond targeted at poor, says DMO D-G

    The Director General of Debt Management Office (DMO), Abraham Nwankwo has stated the new Federal Government of Nigeria Savings Bond (FGNSB) was designed to give them a stake in government.

    He was addressing leaders of market unions and leaders of middle income earner organisations in an advocacy/sensitisation workshop on the FGN Savings Bond in Onitsha.

    He said over the years, government has issued bond, but it remained elitist bonds, which were sold as wholesale bond to privileged individuals, corporate companies and organisation.

    “All these super rich individuals bought it as wholesale bond, but the difference we have in the FGNSB is that we are making these bond available to the ordinary Nigerians. There are a lot to benefits I  investing in the FGNSB. First is that it is an opportunity for the common man to have a stake in the country. You can boost of having borrowed to the federal government,” he said.

    “Again, your investment has interest accruing to you, straight into your bank account, and your interest is tax free. There are many benefits. By Monday next week, the savings bond will open, and it will remain open for five days. We will also disclose the interest rate, and everyone is at liberty to buy. You can invest from as little as N5,000 to as high as N50 million,” Nwankwo said.

    The workshop featured teachings on the workings of bond, and how to purchase them. DMO’s Director of portfolio management, Oladele Afolabi took participants through a lecture on the bonds, while reeling out the list of accredited stockbrokers.

    Chairman of Niger Bridgehead market, Emmanuel Anagu who spoke on behalf of other market leaders, at the event stated that he is truly convinced that the DMO meant well for the poor by taking the workshop to traders in Onitsha.

    “Before now, we hear of sales of federal government bond, but it is usually for the very rich, but today the federal government has brought it down to us, but what we ask is that we must make this workshop a regular one to drum it into the mi D’s of our people.” The DG also reiterated the importance of the purchase of the savings bond, saying that it could serve as a means of saying for the future.

  • DMO to Nigerians: invest in Fed Govt’s savings bond

    DMO to Nigerians: invest in Fed Govt’s savings bond

    The Director-General, Debt Management Office (DMO) Abraham Nwankwo yesterday in Kano stated that the newly introduced Federal Government of Nigeria Savings Bond is designed to empower Nigerians across board with the financial capacity to acquire and live better lives.

    Nwankwo who spoke to representatives of business groups and trade unions during a workshop to sensitise people on the programme, said statistics have shown that Nigeria is witnessing economic growth, but regretted that the growth,  “does not truly reflect in the quality of lives of majority of Nigerian citizens.

    “This prompted the Federal Government to introduce the FGN Savings Bond, which could be afforded by barbers, water vendors, beans cake sellers and petty trader.” He added that before now, the existing FGN Bond is  of benefits to solely  cooperate institutions and wealthy individuals.

    He said it was against this backdrop that the Federal Government came up with its avings bond aimed at achieving  an all inclusive economic growth.

    “The savings bond is targeted at low income earners, artisan, and rural dwellers, with the view that they lend money to the Federal Government from which the government can resort to the provision of infrastructural development and address various public demands with resorting to borrowing,” he added.

    He said the bond was designed in a manner wherein rural communities could key into it, without going through the rigours.

    He pointed out that the savings bond will be traded on the floor of the Nigeria Stock Exchange (NSE).

    On the differences between the newly introduced savings bond and ponzi schemes, he said people’s investment are secured, pointing out that the bond is secured by the Federal Government.

     

    He added that the saving bond cannot default owing to the guaranty that it is backed by the Federal Government.

    He dismissed the perception in certain quarters,  that the Federal Government introduced the bond to bully other  players in the sector, adding that the aim of the government is to enable Nigerians to plan and execute  their  intended future projects by investing in the bond to accumulate whatever amount they require to carry their spelt out project.

  • Fed Govt committed to grassroots’ economic growth, says DMO

    Fed Govt committed to grassroots’ economic growth, says DMO

    • N2.067b Savings Bond listed on NSE

    The Debt Management Office (DMO) yesterday reiterated Federal Government’s commitment to ensuring that people at the grassroots benefit from investment and growth potentials in the economy.

    Its Director-General, Dr. Abraham Nwankwo, who spoke during the listing of N2.067 billion Federal Government of Nigeria (FGN) Savings Bond on the floor of the Nigeria Stock Exchange (NSE) said the bond created opportunity for low cadre investors to build sustainable wealth.

    Also speaking, NSE Chief Executive Officer, Oscar Onyema who approved the listing of the bond, commended the DMO for its commitment for growing the savings bond market.

    Nwankwo, who sounded the closing gong at the NSE said the approval of the bonds listings which comes with 13.01 per cent coupon, said: “It’s an exciting day for Nigerian and DMO in particular; we were giving the opportunity to introduce a savings bond with the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and other relevant agencies for supporting our efforts.”

    He said the Federal Government wanted to ensure that progress being witnessed in the economy, benefits the grassroots.

    The DMO boss said out of the 2,555 people that subscribed for the offer, over 95 per cent were individuals consisting of ordinary Nigerians on the street including barbers, hairdressers, vulcanizers teachers, motor park workers among others.

    “These are the people that subscribed for the offer. We are so excited and happy that Nigeria has broken the jinx to make sure that everybody in the country is part and parcel of activities in the capital market. And that is very consistent with the plan of the Federal Government. I repeat that whatever progress Nigeria is making should be inclusive and ordinary people should be part and parcel of it so we are happy that this aspect of the change agenda has been implemented and this will continue every month,” Nwankwo said.

    He said the funds realised from the offer will be used to fund the budget deficit, and refinance matured existing/domestic bonds.

    He said the bond refinancing makes it possible for the FGN Savings Bond to continue in perpetuity, and on monthly basis. “The April 2017 offer will coming up on April 3, and it will continue every first week of the month. Nigerians will continue to benefit from the FGN Bonds. We congratulate the NSE for their continued initiative and operation for helping to make the listing a success,” he said.

    He said the Savings Bond has helped the ordinary Nigerians to participate in the capital market which creates benefits that will accrue to their investments.

    “What the Federal Government has done through the FGN Savings Bond is to make this opportunity not only for the big investors from pension firms or banks to be part of it, but also for the ordinary man on the street to participate.

  • Fed Govt rolls out N5,000 savings bonds today

    Fed Govt rolls out N5,000 savings bonds today

    The Federal Government will today sell the first tranche of its newly introduced Federal Government of Nigeria Savings Bond (FGNSB). The minimum subscription for the FGNSB has been fixed at N5, 000 while the maximum subscription for the new security is fixed at N50 million.

    The Debt Management Office (DMO), which oversees issuance of Federal Government bonds, will be issuing the savings bonds on behalf of national government. Parties to the debt issue confirmed at the weekend that all arrangements have been concluded for the successful issuance of Nigeria’s first-ever savings bonds.

    Executive Director, Capital Market Division, Nigerian Stock Exchange (NSE), Mr. Haruna Jalo-Waziri, said to ensure that the maiden offer reaches the last-mile subscribers, the DMO has accredited 87 stockbroking firms of the NSE to market and distribute the savings bonds.

    Several stockbroking firms had over the past three weeks been sensitising the investing public about the savings bonds, raising optimism that the initial launch will be a huge success.

    Accredited stockbroking firms, who had launched marketing portals for the FBNSB, included Cowry Asset Management Limited, Capital Bancorp, GTI Securities Limited, Capital Assets Limited, Afrinvest Securities and FSDH Securities.

    Vice Chairman and Chief Executive Officer, Capital Assets Limited, Mr. Ariyo Olushekun, indicated that the government would make enough room to accommodate bids from the retail investors in line with the issuance objectives of widening investors’ base and deepening domestic participation in government securities.

    The savings bond will bear all the regular features of a national bond, including the zero default rate of a sovereign issuance, fixed coupon or interest rate, privileges and exemptions from certain taxes and levies, as outlined by the Central Bank of Nigeria (CBN), Federal Inland Revenue Services (FIRS) and other government ministries, departments and agencies (MDAs).

    The FGNSB is deliberately targeted at the lower income earners as part of government’s plan to encourage savings and reward the low-income savers with more income from their savings compared with savings accounts with banks.

    The bonds will be issued with a tenor (period) of between two to three years and a minimum size (amount that can be purchased) of investment of N5,000 and maximum of N50 million.

    The interest rate, which will be fixed, will be paid quarterly, enhancing the attraction of the savings bond as grassroots instrument for the public.

    The attractions of the savings bonds also included guaranteed returns, competitive fixed interest rate, tax exemption for the interest incomes and collateral for loans.

    The retail savings bonds will, in addition, encourage financial inclusion among low income households and enable the general Nigerian public to enjoy those benefits which accrue to high net-worth investors in the capital market.

    With the collateralisation of the bond certificate, subscribers can use the bond certificate as guarantee and collaterals where such are required in transactions with the DAs, financial institutions and private organisations.

    Investors will also be able to purchase the savings bond in small units through physical offices and several online platforms. After the closure of the primary issue for the savings bond, retail investors will be able to buy and sell the bonds through the Nigerian Stock Exchange (NSE).

    Jalo-Waziri noted that with the FGNSB backed by the full faith and credit of the Federal Government of Nigeria, the bonds would deepen the national savings culture, provide opportunity to all citizens irrespective of income level to contribute to national development as well as enable all citizens to participate in and benefit from the favorable returns available in the capital market.

    He added that the FGNSB will also help to diversify funding sources for the government.

    “The NSE Retail Bond Market was launched in 2012 with the aim of providing retail investors access to high quality debt instruments, as well as afford them portfolio diversification opportunities in an efficient and reliable way. The launch of the FGNSB is consistent with the NSE’s commitment to grow domestic investor participation in the Nigerian capital market, and it is our pleasure to have worked with the DMO and the dealing member community to deliver yet another innovative product that will foster financial inclusion in Nigeria. After the offer closes, the bond will be listed on the NSE and can be traded on our retail bonds market. DMO accredited distribution agents and the government broker will provide liquidity by continuously making two-way quotes throughout the trading session,” Jalo-Waziri said.

    According to him, with an estimated population in excess of 170 million, Nigeria could be seeing yet another paradigm shift where ordinary Nigerians irrespective of their income levels can pool resources to boost government’s effort to mobilize domestic capital required to fund priority sectors of the economy and ultimately serve as a catalyst for economic growth.

  • DMO appoints Stanbic IBTC agent for FGN bond

    DMO appoints Stanbic IBTC agent for FGN bond

    The Debt Management Office (DMO), has named Stanbic IBTC Stockbroker Limited as the receiving agent for the much publicised Federal Government of Nigeria Savings Bond (FGNSB) whose subscription opens on Monday.

    The offer will run for five days, with subscription forms available through Stanbic IBTC Stockbroker Limited and in all branches of Stanbic IBTC Bank across the country.

    According to the Debt Management Office (DMO), the retail savings bond product will be accessible to all income groups for subscription at NGN5,000.00 per unit, with a maximum subscription of N50 million  and a tenor ranging from two to three years.

    Director General, DMO, Dr. Abraham Nwankwo, speaking during the recent listing of the US$1 billion FGN Eurobond on The Nigerian Stock Exchange, had hinted the market of the government’s plan to democratise the bond market by making it easily accessible to most Nigerians.

    He said by promoting retail participation in the bond market, the goal of encouraging an all-inclusive participation in investments and driving financial inclusion in the country will be further enhanced.

    Amongst its many benefits, FGNSB would provide opportunity to all citizens, irrespective of income level, to contribute to national development, deepen the national savings culture; enable all citizens participate in and benefit from the favourable returns available in the capital market as well as diversify investment options for people and funding sources for the government.

    Chief Executive, Stanbic IBTC Stockbrokers Limited, Mrs. Titi Ogungbesan, stated that subscription for the Bond can be made through Stanbic IBTC Stockbrokers, as the sole Government Stockbroker to the Federal Government bond; distribution and receiving agent for the retail savings bond. This means that both current and prospective clients can access the product at any Stanbic IBTC Bank branch nationwide to subscribe to the auction or submit their completed forms.

    “Stanbic IBTC would continue to partner with government and other stakeholders to achieve sustainable economic development, including the deepening of the Nigerian Capital Market, “said Ogungbesan.

    The positioning and transformation of Nigeria’s bond market into a vibrant investment window, she added, requires the collaboration of all stakeholders and reiterated the organisation’s commitment to facilitate stability and growth of the Nigerian capital market, via confidence-building initiatives and leveraging investment opportunities in the market.

    She recalled that Stanbic IBTC Stockbrokers Limited was appointed stockbroker to the Federal Government on FGN Bonds as well as primary market maker by The Nigerian Stock Exchange, in a clear affirmation of the company’s ability to deliver on its mandates as well as the Stanbic IBTC Group’s overall leadership in the various market segments.

    The listing of the Stanbic IBTC ETF 30, an index built on the NSE 30 Index, the SIAML Pension ETF 40, a Pension Index Exchange Traded Fund and the launching of the Stanbic IBTC E-Trade, an online stockbroking platform that allows investors view real-time market information and buy or sell shares, Ogungbesan said.

  • Fed Govt to sell N5,000 savings bond to public

    Fed Govt to sell N5,000 savings bond to public

    The Federal Government has concluded arrangements to launch its first-ever savings bonds into the domestic bond market next month, providing the retail  investing public opportunity to invest in sovereign bond issue for as low as N5,000.

    Market sources and parties to the savings bonds, to be known as Federal Government of Nigeria Savings Bond (FGNSCB), said the issuance of the savings bond could start next month as the government and its professional parties have concluded the pre-offer process for the bond.

    The savings bond will bear all the regular features of a national bond, including the zero default rate of a sovereign issuance, fixed coupon or interest rate, privileges and exemptions from certain taxes and levies, as outlined by the Central Bank of Nigeria (CBN), Federal Inland Revenue Services (FIRS) and other government ministries, departments and agencies (MDAs).

    The Debt Management Office (DMO), which oversees issuance of Federal Government bonds, will be issuing the savings bonds on behalf of national government.

    A copy of the issuance documents obtained at the weekend by The Nation indicated that the FGNSB is deliberately targeted at the lower income earners as part of government’s plan to encourage savings and also earn more income from their savings compared with savings accounts with banks.

    The bonds will be issued with a tenor (period) of between two to three years and a minimum size (amount that can be purchased) of investment of N5,000 and maximum of N50 million.

    The interest rate, which will be fixed, will be paid quarterly, enhancing the attraction of the savings bond as grassroots instrument for the general public.

    The attractions of the savings bonds, according to the issuance documents, included guaranteed returns, competitive fixed interest rate, tax exemption for the interest incomes and collateral for loans.

    The retail savings bonds will, in addition, encourage financial inclusion among low income households and enable the public to enjoy those benefits which accrue to high net-worth investors in the capital market.

    With the collateralisation of the bond certificate, subscribers can use the bond certificate as guarantee and collaterals where such are required in transactions with the MDAs, financial institutions and private organisations.

    Investors will also be able to purchase the savings bond in small units through physical offices and several online platforms. After the closure of the primary issue for the savings bond, retail investors will be able to buy and sell the bonds through the Nigerian Stock Exchange (NSE).

    Already, DMO has reached a Memorandum of Understanding (MoU) with the stockbroking community on the marketing and distribution of the savings bond.

    The savings bonds will be traded like quoted equities and other securities on the NSE with stockbrokers expected to make two-way quotes for the FGNSB in order to provide secondary market liquidity for the savings bond.

    The stockbrokers will act as agents to the DMO for the marketing and distribution of the FGN Savings Bond to retail investors, including selling the FGN Savings Bond to existing clients using their retail investor base and attracting new ones in order to deepen the retail market for FGN securities.

  • Nigeria’s debt hits N17.36tr, says DMO

    Nigeria’s debt hits N17.36tr, says DMO

    Nigeria’s total debt profile as at December 31 last year was $57.39 billion (N17.36 trillion), Director-General of the Debt Management Office (DMO), Abraham Nwankwo said yesterday.

    He spoke during his defence of the agency’s 2017 budget before the Senate Committee on Local and Foreign Debts in Abuja.

    Nwankwo said the amount included domestic and foreign debts. Giving a breakdown, he said the external debt profile stood at $11.41 billion (N3.48 trillion), while the domestic debt stock was $45.98 billion (N13.88 trillion).

    He said the N17. 36 trillion included debts of the Federal Government, the 36 states and the Federal Capital Territory (FCT).

    The D-G said the difference was due to the projected debt service payments in respect of new financing that was not fully utilised, as only few loans became effective during the period.

    He pointed out that the domestic debt stock of the Federal Government, 36 states and the FCT accounted for about 80 per cent of the total debt, while their external debt stock accounted for about 20 per cent.

    He assured that though Nigeria’s debt profile was on the increase, it was not in a precarious economic situation that would warrant seeking for debt relief. Nwankwo added that in spite of the recession, the economic indices had not portrayed Nigeria as a weak economy to warrant seeking for debt relief.

    “Nigeria is not in a position to beg for debt forgiveness. In spite of the present state of the economy, the country is still counted as a strong economy among other countries,: he said.

    The economic indicators show that Nigeria has a strong economy,’’ he said.

    He said if borrowing would be genuinely committed to infrastructural development, it would go a long way in the move to develop the economy.

    On repayment of the debt, he said the Ministry of Finance was making effort to expand the nation’s tax base.

  • DMO urges Nigerians to back govt’s economic recovery plans

    DMO urges Nigerians to back govt’s economic recovery plans

    Debt Management Office (DMO) Director-General Dr. Abraham Nwankwo has implored Nigerians to support the Federal Government’s efforts at getting the country out of recession.

    Speaking at a breakfast meeting with reporters in Lagos, he said the task of revamping the economy was a collective responsibility.

    Nwankwo said the measures so far taken by the government to revive the economy would be fruitful.

    The government, he said, was exploring other regenerative areas that abound in the country as part of measures aimed at strengthening the economy.

    “Indeed, I am emphasising that what we are supposed to be focusing on is being able to establish the minimum amount of resources we need to get out of the woods. Let us put our thinking together and identify the needed resources from the most appealing and attractive sources,” Nwankwo said.

    “Let me emphasise that our focus is on raising revenue in a way that we will use our resources to solve our problems. The focus for all us is to do whatever we can do to set ourselves on the path of sustainable growth. That path entails that we will diversify our economy in such a way that we have several sources of foreign exchange. That should be one of the indicators.

    “If we can replace as many as the things we import, we should be able to establish a sense of sustainability in terms of our recovery. I am optimistic that while the challenges are enormous, the means to get to sustainable growth are abundantly available,” he stated.

    He stressed that “for a country that has been used to high growth in the past 10 years and an economy that has a relatively steady source of revenue which has largely influenced our consumption and investment on social programmes to collapse drastically due to the fall in the price of oil, it puts a greater burden on competent management of resources.

    “One of the most appealing sources for a company, for instance, that has a challenge of revenue, is to look into debt. Getting debt is not as easy as that because it requires planning, so that you don’t go back to the same type of challenge again.”