International investors still have confidence in the Nigerian economy – DMO – Nairametrics
Recent activity in the debt market has shown that Nigeria still has room for new borrowing as international investors continue to have confidence in the Nigerian economy.
Debt Management Bureau chief executive Ms. Patience Oniha said this during a panel discussion marking the 30th anniversary of the Association of Financial Correspondents of Nigeria (FICAN) in Lagos, according to the Daily Trust.
The DMO boss mentioned the oversubscription of Nigeria’s recent Eurobond sale through which the country recently raised $ 4 billion to back up his claim.
What the boss of the DMO says
Oniha, represented by Joe Ugoala, Director of Operations / Research at DMO said:
“In the last edition we just did, where the country raised $ 4 billion, the idea was that we could raise a minimum of $ 3 billion, and we found out that people still have interest in our country.
“Even though we seem to have doubts, international investors still have confidence. They still believe in the fundamentals of this economy. We were asking for $ 3 billion, we ended up having $ 12.2 billion, which is almost 400% of what we actually have demand.
“We have to say this because of our approval from the National Assembly which complies with the requirements of the appropriation law.
“So what the country got out of that exit was $ 4 billion of the $ 12.2 billion. You can see that there is so much interest in the instrument from Nigeria across Asia, America, Europe, and other parts of the world.
“The country has issued three instruments: three tranches of the seven-year instrument, the 12-year instrument and the 30-year instrument. This means that if domestic private investors go abroad to borrow, their instruments can be valued at the price of the sovereign. “
Ms Oniha said the government alone could not meet the country’s infrastructure needs as funds were not available.
“There must be some creative ways to open up the system so that we can bring the private sector, where we can pool capital to finance infrastructure ”, she suggested.
“It started with what we do with the road cleaning infrastructure; with Dangote trying to deal with some roads. Another private sector players will benefit from this tax incentive to encourage them to participate, by keep in mind that government alone cannot do this.
In case you missed it
- The Debt Management Office has previously warned that it is not advisable to finance the government with borrowing, suggesting that borrowing should be for special purposes and urging the FG to do more for revenue as l Nigeria’s growing stock of debt is increasing due to new borrowing in annual budgets and new borrowing approved under the Medium Term External Borrowing Plan.
- The Director General of DMO therefore called for solutions to the rising Nigerian debt stock and low income generation.