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Tag: Patience Oniha

  • FG to issue N20bn 30-year bond on April 24

    The Debt Management Office (DMO) says the Federal Government will on April 24, issue a 30-year bond for the first time.

    The DMO said in a circular on its website on Wednesday in Abuja, that the N20 billion 30-year paper would mature in April 2049.

    Other bonds on offer are a 10-year new issue of N40 billion to mature in April 2029 and a five-year re-opening of N40 billion to mature in April 2023, which was offered at 12.75 per cent.

    The circular, however, did not indicate the interest rates for the new issues.

    Ms Patience Oniha, the Director-General, DMO had at a news conference on April 4, revealed plans by the Federal Government to issue the 30-year paper.

    She said that the bonds were considered, given the relatively low interest rates compared to 2017 levels of more than 18 per cent.

    “The issuance of the bond will meet the needs of annuity funds and other long term investors while also developing the domestic capital market and reducing the re-financing risk of the Federal Government.

    “Another area of focus will be the management of risks associated with the debt stock to mitigate debt service costs.”

    She added that the 30-year issue would enable government raise long-term capital for infrastructure, serve as benchmark for private sector raising of long-term investment capital.

    It would also reduce short-term debt and deepen the Life Insurance sector in particular.

    READ ALSO: Fed Govt okays N195b for EEG debt settlement

    According to DMO, units of sale is N1, 000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

    The bonds are backed by the full faith and credit of the Nigerian Government, with interest payable semi-annually to bondholders, while bullet repayment will be made on maturity date.

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

  • PDP to National Assembly: probe Nigeria’s N24.3tr debt profile

    The Peoples Democratic Party (PDP) has raised questions over Federal Government’s “unwholesome” borrowings amounting to N24.38 trillion debts as the end of last year.

    Debt Management Office (DMO) Director-General Ms. Patience Oniha said last week that the figure comprised of debts owed by the federal and states governments as well as the Federal Capital Territory (FCT).

    She explained that the figure was N2.66 trillion higher than the N21.7 trillion recorded as at December 31, 2017, and represents a year-on-year growth of 12.25 per cent.

    The PDP yesterday called on the National Assembly to investigate how the funds were disbursed.

    In a statement by its spokesman Kola Ologbondiyan, the PDP blamed the government for what it described as saddening and devastating debt overhang on the nation.

    According to the party, the rising debt profile was a product of the government’s failure to stimulate and run a productive economy.

    The DMO boss had explained that the funds were borrowed to finance projects, fund budget deficit and meet maturing obligations, noting that 68.18 per cent of the debt are domestic.

    Ms. Oniha said some foreign debts were borrowed so as to refinance treasury bills because of the short tenor of the bills.

    But the PDP 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.

    Read Also: PDP is bad loser, says Ganduje

    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.

    “President Muhammadu Buhari-led administration therefore has a huge explanation to make to Nigerians…”

    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.

  • Nigeria’s total debt stock grows to 24.3 trillion, says DMO

    The Debt Management Office (DMO) has announced Nigeria’s total debt stock comprising external and domestic debts stand at N24.387 trillion.

    Director General of the DMO Ms. Patience Oniha made this disclosure at the public breakdown of the nation’s public debt data in Abuja on Thursday.

    According to Oniha: “the Total Public Debt stood at N24.387 trillion or USD79.437 billion as at December 31, 2018 representing a year-on-year growth of 12.25%.

    From the breakdown, it was revealed that the FGN External Debt in 2018 was N6. 460 trillion up from N4.527 trillion representing a 42.69% increase.

    “The FGN Domestic Debt in 2018 on the other hand was N12,774 trillion up from N12,589 trillion the previous year representing a 1.46% increase.

    “The sum of both external and domestic FGN debts was put at N19,234 trillion while the total sum of the external and domestic debt stock of the 36 states and the Federal Capital Territory (FCT) was put at  N5,152 trillion broken down as N3,853 trillion domestic debts and N1,298 trillion external debts.”

    Read Also: Three Nigerian students die of tramadol, codeine overdose

    The DMO boss further stated: “Progress was made towards achieving the target Debt Stock mix of 60% (Domestic) and 40% (External). The share of Domestic Debt dropped to 68.18% from 73.36% as at December 31, 2017 thereby achieving a Mix of 68.18% and 31.82% in the Debt Stock.

    “The DMO strategy of using relatively cheaper and longer tenored external funds is achieving the expected objectives.

    “Some of the objectives were: to create more space for other borrowers in the domestic market, extend the average tenor of the debt stock in order to reduce refinancing risk and increase External Reserves.”

    The implementation of the strategy led to an injection of N855 billion through the redemption of Nigerian Treasury Bills in 2018 and a general drop in the FGN’s borrowing rate in the domestic market from over 18% p.a. in 2017 to 14 – 15% p.a. in 2018.

    With regards to the N3.4 trillion Promissory Notes Issuance to Settle Inherited Local Debts, Oniha disclosed that the purpose is to use it to settle Inherited Local Debts and Contractual Obligations of the Federal Government.

    The programme, which is estimated at N3.4trillion, Oniha said covers: Contractors; Exporters; Judgement Debt; State Governments and Oil Marketing companies.

    The features of the promissory notes to be issued are that it will serve as Sovereign and negotiable Instruments and also have Liquid Asset Status.

    The DMO boss stated the FGN’s Domestic Debt Stock includes N331.12 billion Promissory Notes issued to Oil Marketing Companies and State Governments in December 2018.”

    The benefits of issuing the promissory noted the DMO boss stated include: “it will provide stimulus to the economy and unlock investment across a number of sectors currently having liquidity issues; Positive impact on the non-performing loan ratios of banks which will in turn, increase the banks capacity to lend; Enable the Federal Government to formally recognise and account for its true liabilities in line with the International Public Sector Accounting Standards (IPSAS).”

    Some of DMO’s major plans in 2019 are to undertake more of project-tied borrowing and access more external borrowing from Concessional Sources. Furthermore, the DMO announced plans to issue 30-year Federal Government of Nigeria Bonds (FGN Bonds) for the first time.

    “The issuance of the Bond Oniha said: “will meet the needs of annuity funds and other long term investors while also developing the domestic capital market and reducing the re-financing risk of the FGN.”

    Another area of focus in 2019 will be the management of Risks associated with the Debt Stock to mitigate Debt Service Costs.”

    In 2019, Budget Deficit was put at N1. 859 trillion but new borrowings, if passed by the National Assembly have been put at N1.649 trillion.

    By this development, the percentage of Deficit to be Funded by Borrowing in 2019 will 88.7 0%.

    According to Oniha: “the New Borrowing in 2019 (subject to NASS Approval) will be a 50-50 split for Domestic and External both at N824 billion. The domestic borrowing component also known as FGN Bonds, will sourced from Sukuk, Green Bond and Savings Bond while the external (N824 billion) will be largely Concessional, Cheaper and will help reduce Debt Service Cost. Longer-term funds for infrastructure, used to create space for private sector borrowing and Increase External Reserves

    Patience Oniha also explained: “Proceeds of the USD500 million Eurobond raised in November 2017 and USD2.5 Billion were used to redeem the N198.032 billion of Nigerian Treasury Bills (NTBs) that matured in December 2017.

    “Also, USD2.5 billion Eurobond Proceeds (February 2018) were used to redeem N729.95 Billion Nigerian Treasury Bill (NTB) in 2018.”

  • 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.

  • Osinbajo, Saraki, Dogara assure Investors on Economy, Capital Market

    The international community and investors have been assured of the current regime’s commitment towards continued implementation of strategies and policies towards achieving economic development.

    The Vice President Yemi Osinbajo gave the assurance on Monday while speaking in Abuja at the 2nd capital market stakeholders’ forum organised by Senate and House of Representatives Committees on capital market and institutions in collaboration with Securities and Exchange Commission and other stakeholders.

    According to him, some of the initiatives include: Economic Recovery and Growth Plan (ERGP), unprecedented investments in capital projects in the past three years, tax incentives and the Ease of Doing Business.

    Osinbajo who was represented by Patience Oniha, Director General, Debt Management Office said the strategies and policies are aimed at attracting “investors into various sectors of the Nigerian economy with the aim of growing and diversifying the economy, creating jobs and improving the quality of life.”

    While also noting the importance of Nigerian capital market in the attainment of these objectives, he said:

    “Financial markets are known to be engines of growth because of the strategic role they play in the flow of funds to businesses and governments. There is extensive literature on the fact that there is a strong positive correlation between the level of development of the financial system and economic development, for the simple reason that financial markets act as intermediaries between lenders and borrowers.

    Read Also: Buhari, Osinbajo, Saraki, APC governors meet in Aso Villa

    “While this correlation is certainly the case for the advanced market economies, the same cannot be said for Nigerian capital market in the areas of legislations, regulations, technology and products amongst others which have attracted local and foreign investors to the market and I would like to commend the regulators and operators alike for these achievements.”

    Osinbajo further noted  “There is however, room for innovation, increased depth and efficiency of the capital market and this represents an opportune time for these to begin to occur in anticipation of increased and more sophisticated demand for capital market products,”

    He also tasked the stakeholders to come up with “creative ways for enabling small and medium businesses to access capital will also be considered as they have a great potential for growth, job creation and effective source of local resources.”

    The President of the Senate, Bukola Saraki in his speech presented by Senator Philip Aduda said the Capital market, can be a catalyst for development

    “The role of the capital market, and the institutions integral to it, must be emboldened to drive development in the private sector. This means that the fiscal, advisory and empowerment responsibility of our financial institutions will be called on now, more than ever, in entrenching economic policies that will elicit development in the Micro, Small and Medium Enterprises (MSMEs) in the country.

    “I have always maintained that the role of the National Assembly is to give the right platform for all sectors of the economy to thrive. The platform to grow businesses, to draw foreign investments into the country, to sustain meaningful and mutually beneficial investments via bilateral and multilateral instruments. This is our law making responsibility for the economy,” Saraki said.

    In his remarks, Speaker Yakubu Dogara re- echoed the commitment of the National Assembly to the development of the capital market, adding that that the parliament has so far delivered some of the legislative actions enunciated in the communique issued at the maiden capital market stakeholders’ forum held in June, 2016.

    Represented  by Majority Deputy Chief Whip, Pally Iriase, he said: “it is instructive to note that the National Assembly has recorded relevant milestones that is expected to drive the operations of Nigeria’s capital market.

    “These include: passage of demutualisation bill, ongoing amendment of CAMA Act, public hearing held on the amendment of relevant sections of Investment and Securities Act, 2007; review of the Warehouse receipts and other related bills; arbitration and conciliation bill; ports and harbour bill; Nigerian Roads Fund bill; CISI bill; Railway bill;

    He noted there were other legislative intervention through public hearings on ‘downward trend of the capital market’, bonds, securities and private placement and other related bill” currently receiving attention at the National Assembly.

  • 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.

     

  • Fed Govt eyes $2.5b Eurobond sale

    The Federal Government will consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost, the head of the Debt Management Office (DMO), Patience Oniha, said.

    She said the country will also try to get back into the JP Morgan Government Bond Index (GBI-EM), with improving liquidity in the local currency market. She said a Eurobond placement will depend on market conditions, pricing and tenor.

    “We are looking the issue probably first quarter depending on what the advisers say and subject to the market conditions,” the DMO director general told Reuters.

    Nigeria could also look at a possible syndicated loan as an alternative, Oniha said, adding that the issue is part of a $5.5 billion fund raising program approved by parliament last year.

    Nigeria has said it plans to refinance $3 billion worth of a local treasury bill portfolio of 2.7 trillion naira ($8.9 billion).

    In November, Nigeria sold $3 billion in Eurobonds, part of which it used to fund its 2017 budget, and then paid off N198 billion in treasury bills.

    Oniha said local debt yields have started to fall after it paid off the bills in December, though debt was still attractive especially to foreign funds looking at emerging market bonds.

    Meanwhile, investors have oversubscribed the first auction of federal government Bond conducted by the DMO in the year.

    This indicates that the capital market still have strong appetite for the FGN Bond despite recent developments in the capital market.

    The oversubscribed bonds will mature in July 2021 and others in March 2027. The 14.50per cent FGN bond expected to mature in July 2021 was allotted at a rate of 13.3800per cent, while the 16.2884 per cent FGN March 2027 bond was allotted at 13.4910 per cent. Both bonds were oversubscribed, by N150 billion, representing 136 percent.

    Giving that the subscription level was higher for the 10-year benchmark bond, this indicates investors’ preference for longer dated instruments.

     

     

     

     

  • 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

  • Nigeria must borrow responsibly – Shehu Sani

    Nigeria must borrow responsibly – Shehu Sani

    The Chairman, Senate Committee on Local and Foreign Debts, Sen. Shehu Sani, says if Nigeria must borrow, it must borrow responsibly.

    Sani gave the advice in a meeting with the Ministers of Transportation; Finance; Budget and National Planning and Power, Works and Housing on Thursday in Abuja.

    The meeting was in connection with President Muhammadu Buhari’s loan request of 5.5 billion dollars.

    Sani said: “the committee has the mandate to examine the merits and otherwise of the current loan request of 5.5 billion dollars of the president.

    “If we must bequeath to the future generation a pile of debt, it must be justified with commensurate infrastructural proof of the value of the debt.

    “The payment plan of this debt will undoubtedly last the length of our lifetimes and possibly beyond.

    “We must leave behind a legacy that will appease and answer the questions the next generation of Nigerians will ask,” Sani said.

    In his submission, Minister of Transportation, Chibuike Amaechi, said that the central rail line project connecting several communities of northern and southern Nigeria would be completed in June, next year.

    According to him, 17 coaches are expected to arrive in November and out of the number, 10 will be deployed to Abuja-Kaduna rail line while the remaining seven will be deployed to the Itakpe-Warri rail line.

    Amaechi said that part of the money being requested now for approval by the senate was to execute the rail projects covering Kano-Kaduna, and Lagos-Ibadan networks.

    He informed the senators that Buhari’s directive was that all the 36 state capitals of Nigeria must be connected by the ongoing rail projects.

    Also providing insight into the loan request, the Director-General, Debt Management Office, Mrs Patience Oniha, explained that the loans have sustainable benefits that would live beyond the present generation of Nigerians.

    “What we should take away is that we are going into projects whose benefits don’t go away.

    “The roads don’t go away, the schools don’t go away, and the hospitals don’t go away but all that we need to do is to maintain them properly and that is the explanation I want to make on that,” she said.

    NAN

  • Osinbajo calls for commitment in private sector

    Osinbajo calls for commitment in private sector

    Vice President Yemi Osinbajo on Thursday called for the commitment of private sector in economic development as the country exited recession.

    Osinbajo made the call at the 2017 Nigerian Debt Capital Markets Conference and Awards organised by FMDQ OTC Securities Exchange in Lagos.

    NAN reports that Osinbajo was represented by Ms Patience Oniha, the Director-General of the Debt Management Office (DMO).

    He said that the Federal Government required the commitment of all in its diversification strategy to achieve the desired economic growth.

    According to the Vice President, with the growing population, the private sector participation is needed to complement the government’s efforts in area of infrastructure development.

    He said that the private sector participation was important because the sector was efficient in handling projects anywhere in the world.

    On the Nigerian Debt Capital Markets (DCM), he said the private sector needed the market to succeed in business.

    According to him, the country needs a world-class capital market, which is an important factor as regard bond issuance.

    He said that the ability of all sectors to access the debt capital market was necessary to bring the desired economic growth and diversification.

    Osinbajo added that the present determination of Federal Government on the ease of doing business was to enable more investments flow into the country.

    According to him, the ease of doing business makes it easier for business start ups to grow their businesses.

    On the impact of FMDQ to the nation’s Debt Capital Market (DCM), the Vice President said that the existence of the platform had promoted the domestic fixed income market.

    “FMDQ has a pivotal role to play in enabling the authorities meet the long-term projects required for the country,” he said.

    The Finance Minister, Mrs Kemi Adeosun, reiterated that the debt capital market was important in terms of providing funding in the development of infrastructure in the country.

    “DCM will help in deepening the nation’s finance market because we are going to see more direct portfolio investment into the country soon,” Adeosun said.

    She noted that government was restructuring the economy to give the nation’s development a leap.

    “My message to investors is to start taking positions now because Nigeria is growing aggressively economically.

    “We are working very hard to use capital market to address the infrastructural deficit in the country.

    “We have seen a lot of opportunities in the debt market to bridge the gap of funding infrastructure,” she said.

    Adeosun said that Nigeria had all the indices of development and the needed competitive advantage.

    NAN reports that the theme of the conference titled: “Positioning for growth” was part of the DCM’s aspiration to become a world-class market between 2020 and 2025.

    It is also to provide workable solutions that will stimulate growth and accelerate the development of the Nigerian DCM.