A circular from the Debt Management Office (DMO) has revealed that the Federal Government is set to borrow N2.5 trillion from its second FGN bond auction of 2024.
Details show that the auction is set for February 19, 2024, with the settlement date on February 21, 2024.
The Explainer gathered that In the previous month, the DMO offered four bonds worth N90 billion each.
From all indication, the auction appears to be the first time the Federal Government is borrowing over a trillion through a single bond.
The bond offering are as follow:
N1,250,000,000,000.00 – FGN FEB 2031 (7-Yr NEW),Â
N1,250,000,000,000.00 – FGN FEB 2034 (10-Yr NEW)
The first bond is expected to mature in seven years, while the second will mature in 10 years.
The bonds are newly created, and are offered at a unit price of N1,000, with a minimum subscription requirement of N50,001,000 and subsequent increments in multiples of N1,000. Interest payments on FGN bonds are made semi-annually (twice a year).
Meanwhile, The Civil Society Legislative Advocacy Centre (CISLAC) has raised an alarm over the “nonchalance” displayed by the President Bola Tinubu administration towards the country’s rising debt profile.
The Executive Director of CISLAC, Auwal Rafsanjani, in a statement in September 2023, expressed concerns over Nigeria’s startling 75 per cent surge in debt, now towering at a staggering N87 trillion, saying “the figure represents an increase of 75.29 per cent, or N37.53 trillion, compared to N49.85 trillion recorded at the end of March 2023.”
Rafsanjani highlighted the concerning fiscal implications for the nation, especially as it struggles to manage debt interest payments, despite the expected monthly savings of approximately N400 billion from fuel subsidy removal.
