The Federal Government through the Debt Management Office (DMO) raised N3.3 trillion from the domestic market to finance the 2022 budget deficit. To fund part of the 2022 budget deficit DMO was given a target of N3.56 trillion. Director General of the DMO, Ms Patience Oniha at a media briefing yesterday said in Abuja said current efforts to raise funds from the domestic market will not crowd out private investigators “Government borrowing from the domestic market does not crowd out private sector investment in any way,” she said. Asked if the government is not worried that borrowing to fund its 2023 budget could be impeded by the avalanche of tightening measures in the local and International markets, Oniha said: “It’s difficult to predict the outcome of the market ahead of 2023, which is Nigeria’s election year.”
She said DMO has issued a fresh N100 billion Sukuk offer for subscription which is the third of its kind to raise domestic capital. She described Sukuk bond as a project-tied borrowing that enables the government to raise funding for specific infrastructure like roads and bridges.
The new Sukuk offer and the utilisation will close next Tuesday. It has 15.6 percent rental returns and the DMO is optimistic that it would be oversubscribed like previous offers. Patience Oniha noted that beyond the advantage of financing infrastructure, Sukuk: “Is a retail investment for promoting financial inclusion and adverts will be placed in various media platforms to sensitise people about the instrument.”
Oniha added that: “Overall, we’re specifically borrowing to fund infrastructure. But we’re also developing the market and giving people more investment opportunities, it’s a win-win for Nigeria,” The DMO boss stressed that: “Even the contractors are interested because they want to work. So, once they are assured of payment, they go to site and begin to work and when the contractors go to site, they employ people, and then there are all these other ancillary jobs that are created.” The funds that would be raised from the debt instrument (Sukuk) will be used to finance federal road projects on the list of the Federal Ministry of Works and Housing as well as the Federal Capital Territory.