Nigeria’s Bond Revenue Exceeds N4tn In Six Months, Latest Report Reveals

Nigeria’s Bond Revenue Exceeds N4tn In Six Months, Latest Report Reveals

The Federal Government has raised approximately N4.13 trillion from bond issuances in the first half of 2024, according to the FMDQ Exchange Financial Markets Monthly Report for June 2024…….. CONTINUE READING

June’s bond issuance, valued at N297.01 billion, was the lowest in the past six months. In contrast, February saw the highest issuance at N1.49 trillion. The monthly breakdown includes N418.20 billion in January, N608.86 billion in March, N628.81 billion in April, and N682.07 billion in May.

As of June 2024, the total value of outstanding Federal Government bonds, including savings and green bonds, reached N26.22 trillion, marking a 44.49% increase from N18.15 trillion in June 2023.

February’s bond issuance was notably high, with the Debt Management Office offering N1.25 trillion each in seven-year and ten-year bonds. Total bids amounted to N1.9 trillion, with N873.53 billion allocated to the seven-year bond and N621.38 billion to the ten-year bond, totaling N1.49 trillion.

In the second quarter, seven bonds were reopened: two in April (FEB 2031 and FEB 2024), two in May (APR 2029 and FEB 2031), and three in June (APR 2029, FEB 2031, and MAY 2033).

Interest rates for these bonds ranged between 18.50% and 19.89%. By May, the Debt Management Office had raised N4.5 trillion of the proposed N6 trillion bond issuance, with an outstanding N1.5 trillion still to be raised.

Patience Oniha, Director General of the Debt Management Office, emphasized the role of domestic securities in government financing, noting that N7 trillion was raised last year through new domestic borrowing. She also highlighted an increase in foreign portfolio investments, with capital inflows rising to $3.38 billion in Q1 2024, driven by interest rate hikes in Nigeria and rate cuts in advanced economies.

Analysts predict that recent Central Bank of Nigeria interest rate hikes will lead to higher yields on fixed-income instruments, making them more attractive to investors. This trend is expected to impact equities negatively, pushing more investment into fixed-income assets.

Finance Minister Wale Edun announced plans to issue a $500 million diaspora bond in Q3 2024. This bond aims to attract investments from Nigerians abroad and demonstrate the resilience of Nigeria’s economy amid ongoing reforms.