The federal government through the Debt Management Office (DMO) is set to raise N60 billion through bonds as revised guidelines for external and domestic borrowings for all tiers of government as well as agencies.
The DMO in a bond offer circular released yesterday said it plans to raise N20 billion each from the 12.75% FGN APR 2023 five year paper, 12.50% FGN MAR 2035 15 year paper and 12.98% FGN MAR 2050 30 year paper all of which are reopenings next week Wednesday.
Last month, in spite of the lockdown, it had raised N156.06 billion and an additional N20 billion through uncompetitive bids from the three bond auctioned , higher than N60 billion which it initially planned to raise.
Meanwhile, the debt office yesterday released revised external and domestic borrowings guidelines for the federal government, state governments, the federal capital territory as well as their agencies.
The debt office said the revised guidelines which was last issued in 2012, became necessary to reflect recent developments in the fiscal operations of Government, especially in the area of Public Debt Management.
According to it, the guidelines are derived from provisions in extant legislations, principal of which are: The Constitution of the Federal Republic of Nigeria, 1999 (as amended), the Debt Management Office (Establishment, Etc.) Act, 2003, the Fiscal Responsibility Act, 2007, and the Investments and Securities Act, 2007. The Guidelines also incorporate provisions in the Fiscal Sustainability Plan – Fiscal Framework for Sub-National Governments in Nigeria.
The revised guideline states the conditions and processes to be undertaken by the level of government or their agencies seeking either domestic or external borrowings as well as the role of the legislative arm of government in ensuring that due process is followed.
It restated the key legislations guiding borrowings such as the Fiscal Responsibility Act, 2007, Section 41(1a), which provides that “Government at all tiers shall only borrow for capital expenditure and human development, provided that, such borrowing shall be on concessional terms with low interest rate and with a reasonable long amortization period subject to the approval of the appropriate legislative body where necessary.”
According to the DMO, the revised guideline is “in line with the provisions of the Debt Management Office (Establishment, Etc.) Act, 2003, Section 33, which empowers the Debt Management Office (DMO) to issue Guidelines for the effective implementation of its functions, the DMO has released the Revised External and Domestic Borrowing Guidelines for the Federal Government, State Governments, and the Federal Capital Territory (FCT), and their Agencies.
“Through the Issuance of this revised Guidelines, the DMO has provided a useful manual that serves to clarify the process for borrowing, requirements, compliance and documentation, as well as, debt transparency.”