State governments raise bonds worth N600b in 10 years – DMO

The Debt Management Office says state governments have been issued bonds worth over N600 billion to fund infrastructure development in the past 10 years.

Statistics released by Dr. Abraham Nwankwo, the Director-General of the DMO, in Lagos and obtained by the News Agency of Nigeria said that the amount was raised between 2005 and 2014.

Nwankwo said the N600 billion was used by the state governments to refinance existing loans.

He said Nigerian corporate institutions, following the development of domestic bond market between 2005 and 2014, had issued debt instruments worth N223 billion.

“Following the development of domestic bond market between 2005 and 2014 Nigerian corporate institutions have issued debt instruments of about N223 billion, thereby contributing to the development of the real sector,” Nwankwo said.

He said the market also attracted supranational issuers of debt securities such as the International Finance Corporation, a member of the World Bank Group and Africa Development Bank.

The director-general said enviable achievements recorded in the development of the Federal Government’s Bonds Market earned international recognitions for the FGN bond market.

Nwankwo said the achievements included an active secondary market, creation of sovereign yield curve with tenure of up to 20 years and diversification of the investor base for fixed income securities.

He said the achievements recorded in the development of the domestic debt management led to the endorsement of the FGN bond market by reputable international financial institutions.

He said these recognitions were the inclusion of FGN bonds in the widely used JP Morgan’s Government Bond Index-Emerging Markets and Barclays Capital’s Emerging Markets-Local Currency Government Bond Index in October 2012 and March 2013.

He said that the development led to significant in flow of foreign portfolio investments in the country.

According Nwankwo, the DMO will continue to strengthen and deepen the FGN bond market for enhanced liquidity through the issuance of benchmark bonds and introduction of other varieties of debt instruments.

NAN recalls that DMO on July 13, 2015 listed outstanding FGN bonds amounting to N4.85 trillion and Nigerian Treasury Bills worth N2.80 trillion on the FMDQ OTC platform.

Bola Onadele, the FMDQ Managing Director, described the listing as yet another feat for the organisation and reiterated the commitment of the OTC securities exchange to be innovative and credible, in support of the Nigerian economy.

Onadele said FMDQ would continue to provide an efficient platform for the registration, listing, quotation and valuation of debt securities to improve transparency, integration of the domestic and international markets through enhanced trade visibility.

He said the company was committed to improve market surveillance, global presence and competitiveness, enhance secondary market liquidity and effective price formation.

NAN.