FG Borrows N1.5 Trillion From Nigerians, Others in February as Hardship Toughens

• The Debt Management Office raised N1.495 trillion in FGN Bonds auction at its monthly action for February 2024
• According to the DMO data, a 7-year bond maturing in 2021 and a 10-year bond maturing in 2034 were offered
• This occurs at a time when Nigerians are struggling due to rising living expenses that have caused inflation to soar

The Debt Management Office has announced that it raised N1.495 trillion in the FGN Bonds auction in February 2024.

It said this in a recent statement signed by the president of the DMO office on February 20.

FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria issued by the Debt Management Office for and on behalf of the Federal Government.

When anyone buys FGN Bonds, they are lending to the FGN for a specified period, and the government is obligated to pay the bondholder the principal and agreed interest as and when due.

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Details of the bond issued

The DMO stated that it offered N1.25 trillion 7-year FGN Bond maturing in 2031 and another N1.25 trillion 10-year FGN bond maturing in 2034 during the period.

It stated:

"For the offer, the DMO received total bids of N1.9 trillion, making it the highest it has received in any one FGN securities auction. At the close of the auction, a total of N873.53 billion was allotted for the 2031 FGN bonds and N621.38 billion for the 2034 FBN Bond, making a total allotment of N1.495 trillion."

It, however, stressed that a large amount was offered to finance the government's needs and attract opportunities for foreign investors.

It added that this was intended to provide some local investors access to a pool of funds.

This comes as Nigerians face hardship amid the increasing cost of living, which has led to a spike in inflation, FX woes, and other macroeconomic issues.

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In a recent report, Legit.ng reported the total amount of external debt servicing in 2023 from January to October, according to data released by the Central Bank of Nigeria (CBN).

During the ten months, the nation paid $3.07 billion in servicing its foreign debt. The amount represents an increase of $850.42 million or 38.31% over the $2.22 billion it spent during the same time in 2022.

A breakdown of the data showed that to service its external debt, the government spent $112.35 million in January, $288.54 million in February, and $400.47 million in March.

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Legit.ng also reported that the DMO, on behalf of the federal government of Nigeria, announced two-year and three-year savings in October 2023.

The debt office said the bonds would come with an interest rate of up to 12 per cent.

Source: Legit.ng