From Kunle Aderinokun in Abuja, 05.31.2010

Finance Minister Dr. Olusegun Aganga said at the weekend that Nigeria’s total domestic and external debt stood at N4.104 trillion (about $27.36 billion) as at March 31, 2010.


Also, the Director General of the Debt Management Office (DMO) Dr. Abraham Nwankwo put the total outstanding Federal Government Bonds as at April 30 2010, at N2.248 trillion.
These facts were contained in a report of proceedings of the recently-concluded International Forum on FG Bonds for Nigerians in Diaspora organized by the Debt Management Office in Houston, Texas, United States.


Aganga argued that the level of debt is still within the internationally accepted benchmark for measuring debt sustainability.
However, Nwankwo told Nigerians in the Diaspora that bonds were used to raise capital to finance deficits in the FG budget as well as raise funds to execute infrastructural projects: power, electricity and roads and social services such as health and education.


He said that it is used to manage the domestic debt portfolio of the FG more efficiently by elongating the tenor profile from predominantly short term (NTBs) to a combination of short, medium and long term.
Other purposes, according to the report, include “to contribute to the development of domestic financial markets in line with the Financial System Strategy (FSS) 2020, through, introduction of new products to deepen the market; increasing the range of instruments available to investors and creation of a sovereign yield curve to serve as a benchmark for other bond issuers."
Nwankwo said “bonds are generally recognized as instruments that can be used to diversify an investor’s portfolio to achieve stability in value and income."


He listed other benefits of bonds to investors to include “safety of principal and interest as these are guaranteed by the Federal Government of Nigeria (FGN); availability of a range of tenors which provides investors with the opportunity of choosing the bond that matches their investment horizon and relatively high returns.”


Nwankwo continued: "The bonds are tax exempt, implying bigger income in the hands of the investors; the bonds provide an alternative investment to equities, real estate and bank deposits; bonds can be used as collateral for borrowing from banks and discount houses and bonds can be sold either through any of the 21 PDMMs licensed by the DMO or on the floor of the NSE."
Nwankwo assured that the FG bond is a good instrument to invest in towards a target project such as property, children’s education, retirement and home-coming for Nigerians in the Diaspora.


In the report, Aganga, who was represented by the Nigerian Ambassador to the US Professor Adebowale Adefuye was said to have assured Nigerians in Diaspora that “FGN Bonds are high grade instruments that offer you many of the benefits other investment products in the market do not have."
He therefore, recommended it strongly.


Adefuye argued that apart from restoring sanity in the management of the country's debt, the DMO has gone beyond debt management by assuming a strategic role in mobilizing resources for national development.
He added: “In this respect, the DMO has succeeded in raising funds for the provision of critical infrastructure in Nigeria , thereby demonstrating its capacity to collaborate with not only the government but also the private sector. This is indeed commendable.” he added.


“Today, I urge all Nigerians in the Diaspora, especially those of you in the US, to give a concrete expression to this theme by seizing the opportunity of this forum to network and exchange information and ideas about the FGN Bonds and investing in them”, Adefuye advised.

does anyone know the interest rates for these bonds? seems attractive if the governent will guarantees ones capital and interests

What kind of guarantee do you want?
Better factor in the sovereign risk before you buy o!
in response to your question, let me check the interest rate and get back.

as far as they do the right thing at the right time, the right project at the appropriate time. no problem, we can pay it. when the whole debts was paid, what was our improvement, goodluck, i trust you, go onnn

Funny state

Nigeria: Sovereign Bond Issuance Brings US$537 Mil. for Nigerian Federal Government in Debt Auction

26.05.2010


On 20 May 2010, Nigeria raised N80 billion (US$537 million) from the sale of 20-year, 5-year and 3-year sovereign bonds at its fifth debt auction of the year, according to a statement by Nigeria's Debt Management Office (DMO). Successful bids were allotted at the marginal rates of 10 percent, 9 percent and 8.25 percent respectively.

The 20-year note raised a total of 30 billion Naira, while the five-year and three-year denominations raised 25 billion Naira each. The original coupon rates of 5.5 percent for 3-year bonds, 4 percent for 5-year bonds and 8.5 percent for 20-year bonds “will be maintained,” the statement said.

This year Nigeria plans to sell 867.5 billion naira worth of bonds, just under a fifth of the 4.6 trillion planned for budget-deficit financing, said Abraham Nwankwo, Director General of the Debt Management Office.

http://www.mfw4a.org/news/news-details/2/nigeria-sovereign-bond-issuance-brings-us-537-mil-for-nigerian-federal-government-in-debt-auction.html

The question we should be asking is what meaningful project did they use the debt incurred on?We know so far that the 16billion that was main for power generation project went into the pockets of obasanjo and his criminal cohorts.

whao.is that money much.i tink all the money that this people stole from power will be able to pay that dept or all their meaniless allowances will do.by the way,wat did they use the money for.

whao.is that money much.i tink all the money that this people stole from power will be able to pay that dept or all their meaniless allowances will do.by the way,wat did they use the money for.

Nigerian debt are illusive,they are all in private accounts of nigerian politicians,in top european,america,carribeans banks and banks all over the world except nigeria.

Its 17 percent interest on the bonds. not a bad idea.

I thought OBJ reduced our debt profile drastically; how come it is now as high as $27 billion dollars? What is happening?

And who is liable for all this debt - NIGERIANS?

Lets look forward to high taxation when the time to repay comes.

We all know there will be nothing tangible for these huge debts we incur - Apart from politicians bank accounts!

The Government (which frequently changes) is racking up these debts at the expense of the average Nigerian.

And how silly it was to employ an agent of 'Goldman Sachs (Notorius Financial Hitmen) to manange the finances of the country. Jonathan is not 'Sharp' at all.

This is just the start - Nigerians are secretly being sold out to the west!

Expect IMF intervention and sanctions soon as well as the consfication of all the oil and gas fields!

lol

PurestBoy:

Funny state

lol real funny state

SEFAGO:

lol

not just lol but lol x 2

mbulela:

From Kunle Aderinokun in Abuja, 05.31.2010

Finance Minister Dr. Olusegun Aganga said at the weekend that Nigeria’s total domestic and external debt stood at N4.104 trillion (about $27.36 billion) as at March 31, 2010.


Also, the Director General of the Debt Management Office (DMO) Dr. Abraham Nwankwo put the total outstanding Federal Government Bonds as at April 30 2010, at N2.248 trillion.

only, e no much now, 3 senators and 1 ministers can pay it for us if we need their assistance.

omo, when would my home state start issuing bonds so that i can buy? abi them no sabi wetin bonds be? so so sad that everybody keeps waiting for federal govt allocation instead of seeking independence from the federal republic.

paddy lo,
without joining sides with the comment you are attacking above, the problem is not the economics of a local bond market for fiscal measures.
The problem is the problem is the utilisation of such funds for the purposes meant.
If such funds are not utilised for rightful purposes as is the case,we find ourselves in a continous loop where our income (either throughj tax, which is not much considering Nigerians do not like paying taxes or through commodity and resources sales are used to service the bonds).
Secondly, with the sovereign risk inherent in our political system,i ask a risk averse investor will ask for a higher interest rate.

Anyways,

Onigbese govt!

@ Paddy lo
I buy your idea, you are correct as explained but the challenge is If the fund generated is not use for its purpose then it become a loss to the country.
It will only be fine if all the fund so generated is used according to the budget expenditure i.e capital expenditures then there will be a basis for high tax and bills for electricity which of course will increase returns and you and I will be happy to pay our taxes since the amenities are there.
One thing I now for sure is that if thing are done the right way, its multiplier effect will be awesome as we can see in developed nation.
Fro the government,We are willing to pay more But give use good reasons to pay

paddy lo,
good argument again and relevant stats at that.
You are still ignoring the fact that the infrastructure deficit is nolt just a result of low relative public debt but a result of waste, corruption and a lack of continuity in poicies.
If you measure the the value of infrastructure against public debt for each of the countries you mentioned, you get a clue to what i am talking about.
Increasing public debt is not directly related to better infrastructure.It might be in classic economic models but you and i know that the Nigerian case does not follow.

If i was a buying these bonds, the soverign risk inherent would drive me to request for higher rates as a lack of accountability and rampant corruption makes the state too unstable for the rates quoted above.

Re: Aganga: Nigeria’s Total Public Debt Now N4trillion
The money they owe common man abi d one them owe oyinbo?