WorldStage Newsonline– Nigeria’s Debt Management Office (DMO), said it received total submission of N80 billion for the N20 billion auction of 30 years bond introduced in April.
The Director General of DMO, Ms Patience Oniha who disclosed this on Thursday in Abuja during a quarterly press briefing at the federal ministry of finance said, “This month we are issuing another lot so that they can be enough in the market for trading and for all the other investors who wanted. So it’s actually a very strategic move on behalf of the government, as far as it comes to.”
On the issue of promissory note, she said: “But let’s quickly say that the issuance of the promissory notes were approved under certain conditions. Again, by law, the National Assembly has to approve before the issue.”
Oniha, said on those that had been approved at December 31st 2018, “we have actually issued N331 billion of this notes to oil marketers, and to the state governments. And this year, again, in April, we issued the balance.
“So there are others from payment system to the marketers, there’s a timing. Then for the exporters, we are also going through that process and engaging actively with them and the Nigerian Export Promotion Council to make sure that the notes are issued to them for those amongst that have been approved, you know, subject to the terms under which this are issued.”
She further said the 30- year’s bond was introduced for two reasons, “One is benefits government, on the first interest is to raise money, but raising to 30 years also means that we’re managing maturities, our liabilities are maturing, so that debt service is smoother. And it’s easier.
“But more importantly, it is actually the best form of money to use to finance infrastructure, which is where, you know, the government is focused on to, you know, support the recovery that you have achieved.
“For government, those two benefits are good for managing liabilities, which is also financing infrastructure.
“But we also realize that the government plays a developmental role. So usually, once we issue a security in the market, it then means that other groups in the market, the private sector, in particular, they’re able to issue securities for that tenure, for now, there’s no 30 year instrument. So a company would find it difficult to raise 30 year money because the market will know what should be the price, what should be the coupon.”
