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DMO to Sell N430 Billion Bonds in First Quarter
By Obinna Chima
The Debt Management Office (DMO) said it plan to issue between N340 billion to N430 billion of local-currency bonds during the first quarter of this year.
The debt office said on its website it would auction N110 billion to N140 billion worth of bonds maturing in 2021 and N85 billion to N105 billion in debt maturing in 2026. It will also sell N45 billion to N55 billion in bonds maturing in 2027 and N100 billion to N130 billion of the 2036 debt.
According to the debt issuance calendar, the 2027 bond will be a new issue, in March. The rest will re-open previously issued debt, starting after January 18, Reuters reported.
The debt office said on its website it would auction N110 billion to N140 billion worth of bonds maturing in 2021 and N85 billion to N105 billion in debt maturing in 2026. It will also sell N45 billion to N55 billion in bonds maturing in 2027 and N100 billion to N130 billion of the 2036 debt.
According to the debt issuance calendar, the 2027 bond will be a new issue, in March. The rest will re-open previously issued debt, starting after January 18, Reuters reported.
Africa’s biggest economy has proposed a 2017 budget deficit of N2.36 billion for this year. The government hopes to fund it by borrowing N1.254 trillion domestically and N1.067 trillion abroad. But the government had struggled to fund the 2016 budget after a planned Eurobond sale and World Bank loan were delayed.
The Central Bank of Nigeria (CBN) last week sold N172.85 billion at its first treasury bill sale of the year on Wednesday with yields unchanged from the previous auction, held on December 21. Traders revealed that the central bank sold N115.85 billion of one-year debt at a rate of 18.68 percent, the same as the previous auction, traders said. They said the central bank also sold N35 billion of 91-day paper at 14 percent and N22 billion of six-month bills at 17.5 percent, unchanged from the previous auction. Subscription at the auction came to N194.12 billion, well up from N42.68 billion at the previous auction. The central bank issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to help the government fund its budget. The monetary policy committee had last November left the benchmark monetary policy rate at 14 per cent. Inflation also stood at 18.48 per cent in December.
The Central Bank of Nigeria (CBN) last week sold N172.85 billion at its first treasury bill sale of the year on Wednesday with yields unchanged from the previous auction, held on December 21. Traders revealed that the central bank sold N115.85 billion of one-year debt at a rate of 18.68 percent, the same as the previous auction, traders said. They said the central bank also sold N35 billion of 91-day paper at 14 percent and N22 billion of six-month bills at 17.5 percent, unchanged from the previous auction. Subscription at the auction came to N194.12 billion, well up from N42.68 billion at the previous auction. The central bank issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to help the government fund its budget. The monetary policy committee had last November left the benchmark monetary policy rate at 14 per cent. Inflation also stood at 18.48 per cent in December.
Jobs in Third Quarter
The Nigerian economy added 187,226 new jobs in the third quarter of 2016, from 155,444 jobs in the previous quarter, the National Bureau of Statistics (NBS) revealed last week.
Also, THISDAY reported that labour productivity for the quarter rose to N713.7 per hour, compared to N636.3 per hour in the second quarter. Notwithstanding the employment generation report, which was released alongside the labour productivity index by the NBS Monday, January 2, the data came amid rising unemployment of 13.9 per cent during the quarter under review. The NBS further stated that the economy needed to generate 2.6 million jobs annually to hold down the current unemployment rate, as the country’s labour force is estimated to grow at over 2.6 million per annum. According to the job creation report, employment generation was insufficient to meet the ever-growing labour market, leading to the continuous rise in the level of unemployment in the country. NBS said the huge number of unemployed was a reflection of the current economic realities, as only few businesses are growing and employing while many others are shedding jobs.
The Nigerian economy added 187,226 new jobs in the third quarter of 2016, from 155,444 jobs in the previous quarter, the National Bureau of Statistics (NBS) revealed last week.
Also, THISDAY reported that labour productivity for the quarter rose to N713.7 per hour, compared to N636.3 per hour in the second quarter. Notwithstanding the employment generation report, which was released alongside the labour productivity index by the NBS Monday, January 2, the data came amid rising unemployment of 13.9 per cent during the quarter under review. The NBS further stated that the economy needed to generate 2.6 million jobs annually to hold down the current unemployment rate, as the country’s labour force is estimated to grow at over 2.6 million per annum. According to the job creation report, employment generation was insufficient to meet the ever-growing labour market, leading to the continuous rise in the level of unemployment in the country. NBS said the huge number of unemployed was a reflection of the current economic realities, as only few businesses are growing and employing while many others are shedding jobs.
External Reserves
Nigeria’s foreign exchange (forex) reserves continued the appreciation which it commenced about two months ago it closed at $26.094 billion last Wednesday, according to latest figures made available by the CBN. The current value of the reserves, which is derived mostly from the proceeds of crude oil sale represented an appreciation by $2.137 billion or nine per cent, compared with the $23.957 billion it was as at November 2, 2016, data gathered by THISDAY showed. A source who spoke with THISDAY on the condition of anonymity said the increase in the level of exports as well as the drop in imports in the country, following renewed import-substitution drive by the central bank and federal government could be responsible for the appreciation of the external reserves.
THISDAY recently reported that the import substitution policies being driven by the central bank and the federal government appeared to be yielding results, as a country assessment report on Nigeria by the International Monetary Fund (IMF) recently indicated that a sharp decline in imports contributed to a modest recovery in Nigeria’s external current account balance in the first half of 2016.
Infrastructure Funding
Nigeria’s sovereign wealth fund is setting up a company in partnership with London-based local currency guarantee firm, GuarantCo to enable pension funds to invest in Nigerian infrastructure bonds.
The Chief Executive Officer, Nigeria Sovereign Investment Authority (NSIA), Uche Orji, who disclosed this last week said the new business will be launched in a few weeks’ time and aims to overcome some of the challenges facing the financing of infrastructure projects in Africa’s most populous nation.
Infrastructure Funding
Nigeria’s sovereign wealth fund is setting up a company in partnership with London-based local currency guarantee firm, GuarantCo to enable pension funds to invest in Nigerian infrastructure bonds.
The Chief Executive Officer, Nigeria Sovereign Investment Authority (NSIA), Uche Orji, who disclosed this last week said the new business will be launched in a few weeks’ time and aims to overcome some of the challenges facing the financing of infrastructure projects in Africa’s most populous nation.
“The company will provide enhancements for infrastructure bonds, and we believe this will make an effective platform for Nigerian pension funds to invest in them,” Reuters quoted Orji as saying.
GuarantCo facilitates infrastructure development in low income countries by providing credit guarantees denominated in local currency to financial institutions and bond investors. It is funded by Britain, Switzerland, Sweden, the Netherlands and Australia, and specialises in frontier market infrastructure.
GuarantCo facilitates infrastructure development in low income countries by providing credit guarantees denominated in local currency to financial institutions and bond investors. It is funded by Britain, Switzerland, Sweden, the Netherlands and Australia, and specialises in frontier market infrastructure.
NPLs Seen Rising
Access Bank Plc last week said it was expecting that the level of troubled loans in Nigeria will continue to climb before an economic recovery in the second half of the year brings relief to the country’s lenders.
“Across the entire industry you will see an uptick in non-performing loan ratios,” the bank’s Chief Executive Officer, Herbert Wigwe, told Bloomberg in an interview. “We are better than most.”
Nigeria’s fourth-largest bank by assets expects that its non-performing loans (NPLs) will climb to “slightly below” three per cent of total loans by the end of this year, Wigwe said, compared with 2.1 percent for the nine months through September. The picture is not as rosy for the rest of the industry as lower crude prices and foreign-currency shortages cause Africa’s largest economy to contract. Loans in the sector in danger of not being repaid surged to an average 13.4 percent by the end of September, above the five per cent threshold set by regulators. Access Bank is targeting companies that source their raw materials locally for loans to reduce the risk of unpaid debt, the CEO said.
