Federal Government Seeks N450 Billion from June 2024 Bond Auction
Are you curious about Nigeria’s current public debt situation? Well, the latest figures from the Debt Management Office (DMO) reveal that Nigeria’s total public debt has reached a staggering N121.67 trillion ($91.46 billion) as of March 31, 2024. This is a significant increase from the previous figure of N97.34 trillion ($108.23 billion) as of December 31, 2023.
The breakdown of the debt shows that the domestic debt portion stands at N65.65 trillion ($46.29 billion), while the external debt is N56.02 trillion ($42.12 billion). The DMO attributes the growth in the domestic debt component to new borrowing to finance the 2024 budget deficit and securitization of a portion of the Ways and Means Advances at the Central Bank of Nigeria.
In light of this, the Federal Government is seeking to raise at least N450 billion through a bond auction scheduled for June 24, 2024. The bond offer comprises three different re-openings with varying maturity dates and interest rates. This includes N150 billion at 19.30% FGN APR 2029 (5-Year Re-opening), N150 billion at 18.50% FGN FEB 2031 (7-Year Re-opening), and N150 billion at 19.89% FGN MAY 2033 (9-Year Re-opening).
Interested investors can participate in the auction through authorized Primary Dealer Market Makers (PDMMs) such as Access Bank Plc, First Bank of Nigeria Ltd, Stanbic IBTC Bank Ltd, and Citibank Nigeria Ltd. The minimum subscription requirement is N50,001,000, with subsequent bids in multiples of N1,000.
As the government continues to borrow to finance its operations, there is an expectation for improvements in revenue to enhance debt sustainability. This bond auction is in line with the legal framework provided by the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004.
Stay informed about Nigeria’s financial landscape and consider participating in the upcoming bond auction to support the country’s economic development. Keep an eye out for more updates on this topic and make informed investment decisions.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. The content is based on general research and may not be accurate, reliable, or up-to-date. Before making any financial decisions, it is recommended to consult with a professional financial advisor or conduct thorough research to verify the accuracy of the information presented. The author and publisher disclaim any liability for any financial losses or damages incurred as a result of relying on the information provided in this article. Readers are encouraged to independently verify the facts and information before making any financial decisions.