The Federal Government plans to borrow between N420 billion and N510 billion in the first quarter of this year through issuance of domestic bonds, the Debt Management Office (DMO) announced yesterday in its debt calendar for the first three months of 2020.
The DMO said the government will raise funds through the issuance of between N140 billion and N170 billion apiece across three tenor paper on January 22, 2020, as part of measures to finance a portion of the country’s N10.59 trillion budget.
The DMO plans to raise the funds through the sales of 5-year, 10-year and 30-year tenor bonds in the first three months of this year at its usual monthly debt auction.
The debt office will also raise the same amount at the February 19 and March 25 debt auction, where more offshore portfolio investors are expected to participate.
On December 17, President Muhammadu Buhari signed the N10.59 trillion 2020 budget into law to finally return the country back to January-December fiscal cycle.
Nigeria projected an estimated N2.18 trillion deficit in the 2020 budget and would be financed through foreign and domestic borrowing.
The government is yet to reveal how it intends to raise the foreign components of the deficit, but the President had presented a request to the National Assembly for approval of the 2016 – 2018 Medium Term External Borrowing Plan for $22.718 billion.
Yields on domestic debt have fallen sharply from a high of 18 percent a year ago to an average of 12 percent, with the 5-year paper attracted 11 percent, 10-year traded at 12 percent while the longest tenor of 30-year was sold at 13 percent at the Dec. auction.
