The Debt Management Office (DMO) disclosed on Wednesday that the federal government has made adequate budgetary provisions to meet its debt obligations.
Citing a statement issued by the DMO, the News Agency of Nigeria (NAN) cited the debt management agency as saying that Nigeria has unfailingly serviced its external and domestic debts promptly, culminating in increased investor interest in federal government bonds.
Such efforts, the DMO noted, reflect the country’s strict adherence to best practices in debt management.
The DMO explained that the country’s ability to meet its debt obligations is supported by effective planning and allocation through the Medium-Term Expenditure Framework (MTEF) and annual budgets.
Nigeria’s debt management, it added, is carried out in accordance with relevant legislations and regulations as well as in conformity with international practice
The DMO revealed the recent successful issuance of 2.2 billion dollars in Eurobonds on the international capital markets, which received subscriptions exceeding 9 billion dollars.
“Nigeria attracted a wide range of investors from multiple jurisdictions, including the UK, North America, Europe, Asia, the Middle East, and participation from Nigerian investors.
“It is an expression of continued investor confidence in the country’s sound macro-economic policy framework and prudent fiscal and monetary management.
“The transaction attracted a peak orderbook of more than nine billion dollars. This underscores the strong support for the transaction across geography and investor class,” it said.
The DMO explained that demand for the Eurobonds came from a mix of fund managers, insurance and pension funds, hedge funds, banks, and other financial institutions.
“In addition, one of the landmark achievements of the Eurobond is that it opened up opportunities for banks and other corporate entities in the Eurobond market,” it said.
Meanwhile, the President, Capital Market Academics of Nigeria (CMAN) and Director, Institute of Capital Market Studies, Nasarawa State University, Prof. Uche Uwaleke has advised the federal government to float 5-10 per cent of shares in the Nigerian National Petroleum Company Limited (NNPCL) for sale on the Nigerian Exchange under Initial Public Offering (IPO) arrangement.
According to him, privatisation proceeds like floating between 5 to 10 per cent shares of NNPCL as IPO could be used to finance critical infrastructure projects in the 2025 -2027 spending plan.
Uwaleke, a former Commissioner for Finance in Imo State who delivered a keynote address at the recent investiture of some distinguished Nigerians as Fellows of CMAN said while listing on the stock exchange takes a long, IPOs provides a fast veritable source funding for infrastructure.
Listing capital market funding options that the federal government can latch on, he said asset-backed securities are suitable for financing income-generating assets such as ports and road infrastructure.
He noted that Malaysia and India were good examples.
Ndubuisi Francis
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