FG To Increase Borrowings From Capital Market To Fund 2021 Budget- DMO

The Federal Government is set to expand its borrowings from the fixed income market to fund part of Nigeria’s N4.28trn deficit in the 2021 budget appropriation and support the economy, the Debt Management Office said.

The Director-General, DMO, Ms. Patience Oniha, said this during a monitored webinar on fixed income market.

The Nigerian Stock Exchange hosted the two-day session in partnership with county’s Development Office and CSL Stockbrokers.

“While we have always had the money market and the capital market, the fixed income market has grown to become active today with capital raising from government, corporates and multilaterals,” the DMO chief said.

During the first half of 2020, the Federal Government raised a total of N1.54trn from domestic investors through bond auctions by the DMO.

The funds would cover part of the 2020 budget deficit as the country has suffered huge revenue setback arising from Covid-19 induce fall in crude oil prices.

Oniha said, ” This shows that our market is capable of attracting both domestic and international players for the overall good of the economy.

” In meeting our objectives to finance the budget and deepen capital market activity, we remain committed to using the fixed income platform to support various aspects of the economy.

“We will also remain responsive to investors’ needs for portfolio diversification by expanding our fixed income market with more sophisticated debt instruments.”

The Chief Executive Officer, of the NSE, Mr. Oscar Onyema, said the Exchange continues to be the foremost platform creating new types of debt instruments in Nigeria with a market capitalization of about N16.4tn.

He said the NSE will offer capital raising opportunities and secondary trading to all classes of issuers including Sovereign, Subnational, Corporates and Supra-national bonds.

He said, “The Exchange facilitates the interaction between borrowers and lenders in Nigeria driving efficient allocation of capital.

“With fixed income markets representing one of the largest subsets of global financial markets, NSE reiterates its commitment to providing a hybrid market for dealers as well as institutional and retail investors to continue to access increased liquidity in fixed income securities.”