Barbara Bako, Abuja.
If the National Assembly Approves, the Debt Management Office (DMO) will borrow N1.648 trillion for 2019 fiscal year.
Patience Oniha, DMO Director General (DG) announced while releasing the Public Debt Data as At December 2018 Thursday in Abuja.
The borrowing plans is 50-50 split for Domestic and External in the 2019 fiscal year.
DMO plans that the domestic borrowing of N824 billion will come from the Federal Government of Nigeria (FGN) Bonds, Sukuk, Green Bond , Savings Bond while the N824 billion External borrowing will be largely concessional, cheaper and will help reduce Debt Service Cost.
The borrowing sources offer longer-term funds for infrastructure, create space for private sector borrowing as well as increase External Reserves.
This year, the DMO major plans are more of project-tied borrowing and also issuance of 30-year FGN Bonds for the first time.
The Bond will serve the needs of annuity funds and other long term investors while also developing the domestic capital market and reducing the re-financing risk of the FGN.
In addition, the Debt Office will focus on the management of risks associated with the Debt Stock to mitigate Debt Service Costs.
The Public Debt Data Report which provides a breakdown of the Debt between the Federal and the State Governments (including the Federal Capital Territory) shows that the Total Public Debt stood at N24.387 trillion or USD79.437 billion as at December 31, 2018 representing a year-on-year growth of 12.25%.
The report showcased the progress towards achieving the target Debt Stock mix of 60% (Domestic) and 40% (External) in which
the Domestic Debt dropped to 68.18% from 73.36% Record of December 31, 2017 representing a Mix of 68.18% and 31.82% in the Debt Stock.
The decline shows the strategy of using relatively cheaper and longer tenored external funds paid off as planned. The Office had planned to create more space for other borrowers in the domestic market, extend the average tenor of the debt stock in order to reduce refinancing risk and increase External Reserves.
This strategy led to an injection of N855 billion through the redemption of Nigerian Treasury Bills in 2018 and a general drop in the FGN’s borrowing rate in the domestic market from over 18% p.a. in 2017 to 14 – 15% p.a. in 2018.
The DMO stated that the FGN’s Domestic Debt Stock includes N331.12 billion Promissory Notes issued to Oil Marketing Companies and State Governments in December 2018.
Comments are closed.