The Debt Management Office (DMO) in Nigeria has announced ambitious plans to raise N1.8 trillion through the issuance and reopening of federal government bonds over the next three months, as the country grapples with a growing debt burden.
In a bid to meet this target, the DMO has opened offers for the April 2024 Savings Bond, with plans to raise between N300 billion to N600 billion every month from April to June this year. This includes the introduction of a new five-year bond, as well as the reissuance of the 7-year 18.50 per cent FGN FEB 2031 paper and the 10-year 19.00 per cent FGN FEB 2034 paper.
Additionally, the DMO aims to raise more funds this week through the issuance of the 2-year and 3-year savings bonds due in April 2026 and April 2027. The 2-year paper is being offered at 17.046 per cent per annum, while the 3-year paper is being issued at 18.046 per cent per annum.
The decision to increase the interest rates on the savings bonds is in response to the recent hike in the Monetary Policy Rate to 24.75 per cent during the last Monetary Policy Committee meeting. This move aims to align the interest rates closer to the prevailing market conditions.
It is worth noting that Nigeria’s total public debt stock surged to N97.3 trillion in 2023, more than doubling from previous years. This figure encompasses both external and domestic loans taken by the federal and state governments.
The DMO’s proactive approach to managing the country’s debt obligations underscores the importance of financial prudence and strategic planning in navigating the complex economic landscape. As Nigeria continues to grapple with its debt challenges, the DMO’s efforts to raise funds through bond issuances play a crucial role in ensuring fiscal stability and sustainable economic growth.
