Nigeria’s Debt Management Office (DMO) has unveiled plans to raise up to N1.2 trillion by re-issuing federal government bonds. The initiative, outlined in the DMO’s bond issuance calendar for the final quarter of 2023, aims to obtain funds through the reissuance of bonds with maturities spanning from 10 to 30 years. The DMO plans to reopen specific bonds, including the 14.55% FGN APR 2029 and the 15.70% FGN JUN 2053. Each reissuance is expected to raise between N80 billion to N100 billion, with designated reopening dates set for October 16, November 13, and December 11, 2023.
Key Points:
- The DMO intends to raise between N960 billion to N1.2 trillion over three months, from October to December 2023, through the re-issuance of federal government bonds.
- Bonds with maturities ranging from 10 to 30 years will be reissued, including the 14.55% FGN APR 2029 and the 15.70% FGN JUN 2053.
- Each reissuance is projected to raise between N80 billion to N100 billion.
- As of June 30, 2023, Nigeria’s total domestic debt amounted to N48.34 trillion, with FGN bonds constituting 86.87% of the total figure.
- In the second quarter of 2023, Nigeria’s domestic debt servicing expenses amounted to N565.88 billion, reflecting a significant decrease from the N874.12 billion spent in the first quarter.
Analysis: The DMO’s plan to raise additional funds through bond reissuance indicates a strategic approach to managing Nigeria’s debt profile. By leveraging existing bonds, the government aims to secure substantial financing. The choice to reopen specific bonds reflects a targeted approach to tap into available resources. Additionally, the significant reduction in domestic debt servicing expenses in the second quarter suggests an effort to optimize debt management. This move may have been influenced by various economic factors, including interest rates and inflation dynamics. It will be essential to monitor the impact of these measures on Nigeria’s fiscal stability and economic trajectory.
