FG to raise N470bn in third quarter

By Moses Obajemu

The federal government is to raise a total of N470 billion in the third quarter of 2020 through the bond market.

A schedule of bond auctions for the quarter displayed by the Debt Management Office (DMO) shows that a total of N130 billion would be raised in July; N185 billion in August; and N155 billion in September.

The money and other borrowings will be used to financed the over N5 trillion deficit embedded in the 2020 federal budget which has a total package of N10.8 trillion.

Recently, Zaianab Ahmed, Finance minister, said the federal government had identified both oil and non oil sources that would fetch the government between N13 trillion and N18 trillion to fund the budget and help it achieve 15 percent revenue to GDP ratio of the budget.

Also, the July bond auction of the federal government achieved a whopping 350 percent over subscription when N470 billion was subscribed as against the N130 billion value of the bond offer.

The total subscription received for the bonds was N470.13bn, comprising of N71.97bn for the 12.5 per cent FGN January 2026 bonds; N60.32bn for the 12.5 per cent FGN March 2035 bonds; N130.27bn for the 9.8 per cent FGN July 2045 bonds; and N207.57bn for the 12.98 per cent FGN March 2050 bonds.

The 12.5 per cent FGN January bond was offered for N25bn, while the other three bonds were offered for N35bn each.

The auction results published on the DMO site on Wednesday said that 36, 58, 70 and 29 were successful bids for the total bids for each bonds auction of 97, 87, 131 and 189 bids.

According to the DMO, successful bids for the 12.5000 per cent FGN January 2026, 12.5000 per cent FGN March 2035, 9.80 per cent FGN July 2045 and 12.9800 per cent FGN March 2050 were allotted at the marginal rates of six per cent, 9.5 per cent, 9.8 per cent and 9.95 per cent respectively.