The Debt Management Office (DMO) said it has assisted the Federal Government to raise a total sum of N3.3 trillion from the domestic market to finance the 2022 budget deficit.
Director-General of the Debt Management Office (DMO), Ms. Patience Oniha who disclosed this in Abuja on Wednesday, explained that current efforts to raise funds from the domestic market will not crowd out private investors.
It is on record that the DMO was given a target of N3.56 trillion in revenue to finance the 2022 budget deficit.
Ms. Oniha said, “government borrowing from the domestic market does not crowd out private sector investment in any way”.
Reacting to the notion in some quarters that government borrowing to fund its 2023 budget could be impeded by the avalanche of tightening measures in the local and International markets, Ms. Oniha responded: “it’s difficult to predict the outcome of the market ahead of 2023, which is Nigeria’s election year”.
The DMO boss pointed out that the Office has also issued a fresh N100 billion Sukuk offer for subscription, the third of its kind to raise domestic capital.
Ms. Oniha explained that Sukuk is a project-tied borrowing that enables the government to raise funding for specific infrastructures like roads and bridges, adding that the new Sukuk offer and the utilisation will close next Tuesday. It has 15.6 percent rental returns and the DMO is optimistic that it would be oversubscribed like previous offers.
Ms. Oniha stated that beyond the advantage of financing infrastructure, Sukuk “is a retail investment for promoting financial inclusion and adverts will be placed in various media platforms to sensitise people about the instrument”.
She noted that “overall, we’re specifically borrowing to fund infrastructure. But we’re also developing the market and giving people more investment opportunities, it’s a win-win for Nigeria.”
According to her, “even the contractors are interested because they want to work. So, once they are assured of payment, they go to the site and begin to work and when the contractors go to the site, they employ people, and then there are all these other ancillary jobs that are created.”
The funds that would be raised from the Sukuk will be used to finance federal road projects on the list of the Federal Ministry of Works and Housing as well as the Federal Capital Territory (FCT).