FG raises N4.13trn to finance 2024 budget
Data from Debt Management Office (DMO) has revealed that Federal Government raised an estimated N4.13 trillion through the FGN Bond market to finance budget deficit in the first half (H1) of 2024.
An investigation by WESTERN POST showed that while DMO offered to raise N4.66 trillion in the period under review, total subscription nearly reached the N5tillion mark to N4.89 trillion total raised through FGN bond market in the period under review.
The Director General of DMO, Ms. Patience Oniha in June 2024 had stated that the FG has raised N4.5 trillion out of the N6 trillion target in the 2024 budget.
She noted that domestic securities remain a major source of federal government spending.
She stated, “Last year, we raised seven trillion Naira as new domestic borrowing. It speaks to the size of the domestic market, its resilience, and its sophistication, unlike we have in many African markets.”
“Out of the new domestic borrowing of six trillion Naira, we have raised N4.5 trillion. For the Ways and Means, out of seven trillion approved for securitisation, we have raised N4.905 trillion. The financial sector has come a long way, and this is another strategic meeting to chart a way forward.”
In January 2024, the FG realised about N418.19 billion from the domestic bonds market through the DMO while it offered N360 billion to investing public.
The FGN auction in January 2024 recorded a N604.557 billion and N418.197 billion total subscription and allotted amount, respectively.
The FG in February 2024 raised N1.49 trillion from two FGN bonds offer. Both bonds are newly created and 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. The offer for February 2024, witnessed N2.5 trillion offered amount and a subscription of N1.9trillion
In March 2024, the federal government returns of the federal government reached N475.67 billion– far below what was recorded in February despite a higher interest rate.
Furthermore, the debt office announced that the FGN raised N626.813 billion in its April 2024 FGN bond auction.
This amount represents an increase of approximately 32per cent compared to the N475.67 billion raised in the previous month’s auction. The substantial capital inflow was achieved through the sale of long-term securities, distributed across three distinct bond series with varying maturities.
In light of higher interest rates from the CBN, the DMO FGN bond offer has seen an increased appetite from the public. The interest rates for the FGN bonds offer for April stood at 18per cent– one of the highest on record.
In May 2024, the DMO offered to raise N450billion from investing public and it recorded N551.316billion subscription and N682.069 was allocated.
In addition, the FG has raised N297.006 billion from the June 2024 bond auction.
The amount raised is about 66 per cent of its target and about 22 per cent less than the N380.769 billion raised in May.
The total subscription across all tenors was N305.257 billion, an amount lower than the N551.316 billion recorded in the previous month.
The auction, which took place on June 24, 2024, featured the re-opening of three Federal Government of Nigeria (FGN) bonds: the 19.30% FGN APR 2029, the 18.50% FGN FEB 2031, and the 19.89% FGN MAY 2033.
Despite offering a total of N450 billion across these bonds, the total subscription amounted to N305.257 billion, and the total amount allotted was N297.006 billion, indicating that it was undersubscribed.
