By Nse Anthony-Uko
ABUJA, (Sundiata Finance) – The Federal Government of Nigeria is planning to sell between N360 billion and N450 billion ($1.48 billion) worth of local currency bonds in the third quarter of the year, according to its bond auction schedule released on Wednesday by the country’s Debt Management Office (DMO).
According to the debt office, the bond auctions would consist entirely of re-openings of previously issued bonds. The schedule shows that the government plans to sell between N90 billion and N120 billion domestic bonds which matures in 2021, N135 billion – N155 billion ten-year paper due 2027 and N135 billion – N155 billion twenty-year paper due in 2037.
The DMO plans to issue these bonds monthly throughout the quarter with yields ranging from 14.5 percent to 16.25 percent which is just the same with the country’s current inflation level.
The government issues domestic bonds monthly to raise funds to finance a N2.36 trillion budget deficit which it plans to finance through local and external borrowings. In the first half of the year, the government was able to raise N849.5 billion through the monthly issuance of local according to bond auction results available on the DMO website.
The government is also exploring other avenues to raise funds for the year’s budget worth 7.44 trillion including the introduction of a $300 million Diaspora bonds which recently opened on the London Stock Exchange.
The bond which was 30 per cent oversubscribed is targeted at citizens of Nigeria who are resident abroad but are interested in making profitable investment for the infrastructural development of the country.