N50 billion bond auction holds Dec. 9
‘Market is liquid for public, private fund raising’
The nation’s debt manager- Debt Management Office (DMO) has affirmed that the country’s debt profile is sustainable, despite volatilities in the international capital market and cascading oil prices.
Indeed, DMO has unveiled plans to auction a N50 billion local currency denominated bond on December 9.
The Federal Government’s debt plan, which may be the last for the year, would be February 2020 (five-year) and March 2024 (10 year) maturing bonds.
DMO, in its offer circular, noted that the bonds auctions mark the reopening of previously issued papers, while results of the auction will be published the following day.
The 2020 bonds, had on Wednesday, closed with a yield of 11.73 per cent, while that of 2024 settled at 11.85 per cent, as market analysts expressed fears that yields would fall at the auction in the coming week.
Meanwhile, the February 2020 N30 billion bond will be offered at the rate of 15.54 per cent, while the March 2024 N20 billion bond goes for 14.20 per cent.
However, the Director-General of DMO, Dr. Abraham Nwankwo, has said that the nation’s bond market has been developed such that it is capable of raising needed capital for both the Federal Government and private sector operators if they so desire.
“We have built the corporate bond market and benchmark it against the sovereign bond market. What is happening in the foreign bond market is also happening the local market. Already, we have a list of corporate organisations taking advantage of the opportunity,” he said.
Nwankwo noted that the country’s public debt-to-Gross Domestic Product remained sustainable as a result of the insightful management of the debt portfolio, even in the midst of crude oil price slump.
According to him, while other countries base their borrowing on debt-GDP ratio of 56 per cent, Nigeria decided not to exceed 19.39 per cent until 2017.
He pointed out that Nigeria has abundant resources in agriculture, solid minerals, Information Communications Technology, among others, that have not been tapped, but offer ample opportunity for diversification of the economy to enhance revenue.
Our debt continues to be sustainable, despite all these volatilities in the international capital market and the collapse of oil prices. However, it does not mean that Nigeria should go and sleep and hope that providence will continue to provide for them.
“We have to work hard so that in the next two years, our debts will even be more sustainable, when we would have diversified fully into agriculture, solid minerals, among others. All of us will need to put hands together to mobilise resources both in equity and debts to make sure that our roads and rails are working; agriculture is revitalised and our manufacturing companies attain higher capacity utilisation,” he said.
He assured that Nigerians have nothing to fear over the level of public debt and its management, but should see this period as the time to work harder to grow the economy.
