Tinubu’s Government Moves to Borrow N2.5 Trillion From Investment of Nigerians to Fund Budget
- The Nigerian government is making plans to borrow N2.5 trillion from the FGN Bond auction of 2024
- The move is to finance its N9.7 trillion 2024 budget and plans to repay the bond on February 21, 2024
- The latest move is the first time the federal government is borrowing over N1 trillion from a single bond
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Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Nigerian government seeks to borrow N2.5 trillion from its second FGN bond auction in 2024, a recent Debt Management Office (DMO) circular said.
The circular said the auction is set for February 19, 2o24, with a settlement date slated for February 21, 2024.
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FG to borrow from the investment of Nigerians
In January, the DMO offered four bonds worth N90 billion each; the February auction is the first time the Nigerian government has borrowed over N1 trillion via a single bond.
According to reports, FGN bonds meet the conditions outlined in the Trustee Investment Act, allowing trustees to invest in them. Also, they qualify as Government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act and ensure they are tax-exempt for Pension Funds and other investors.
After the bonds are sold in the primary market to the primary dealer market makers, the bonds are then listed on the Nigerian Exchange Limited and FMDQ OTC Securities Exchange, the secondary markets.
FG offers more bonds
The Nigerian government raised about N5.49 trillion via FGN bond auctions in 2023, which were used to finance the 2023 budget deficit of N11.34 trillion.
Also, the Federal Government raised about N418.197 billion from the four bonds it auctioned.
Analysts believe the Nigerian government will borrow more from the domestic to fund its N9.18 trillion budget in 2024.
The Debt Management Office (DMO) offers monthly bonds, which attract yields for investors.
FGN bonds are the critical means of funding key infrastructure in Nigeria as Nigerians invest.
Investment analyst Chidi Ikeh says FGN bonds are one of the ways the government funds its budget and critical projects.
He said:
"With Nigerians investing in bonds, they are helping the government to fund its budget and provide critical amenities for the citizens,
FGN bonds are some of the best investment plans anyone can make because the integrity of the federal government backs them; investing in FGN bonds is better than buying shares.
Tinubu’s govt invites Nigerians to save
Legit.ng reported that Nigeria's Debt Management Office (DMO), on behalf of the Federal Government of Nigeria, has announced two-year and three-year savings bonds for October 2023.
According to a statement by DMO, the offer opens on October 03, 2023, and closes on October 06 2023.
The debt office also said the bonds come with an interest rate of up to 12 per cent, and subscriptions will be open for four days.
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Source: Legit.ng
