DMO Raises N3.3trn from Domestic Market to Finance 2022 Budget Deficit

Ndubuisi Francis in Abuja

The Debt Management Office (DMO) disclosed yesterday that it has so far helped the federal government raise N3.3 trillion from the domestic market to finance the 2022 Budget deficit.

The DMO Director General, Ms. Patience Oniha, who made the disclosure in Abuja, at a media briefing, explained that current efforts to raise funds from the domestic market would not crowd out the private sector

The DMO was allocated a N3.56 trillion revenue to finance the 2022 budget deficit.

Oniha said: “Government borrowing from the domestic market does not crowd out private sector investment in any way.”

In response to a question on whether borrowing to fund the 2023 budget could be hamstrung by the spate of tightening measures in the local and global markets, Oniha said it was difficult to predict the outcome of the market ahead of 2023, which is Nigeria’s election year.

Oniha stressed that the privatisation agency had also issued a fresh N100 billion Sukuk offer for subscription

Between 2017 and 2021, the DMO had raised N362.57 billion Sovereign Sukuk issued finance infrastructure projects nationwide.

Sukuk is a project-tied borrowing that enables the government to raise funding for specific infrastructure like roads and bridges.

The agency has issued a new N100 billion Sukuk offer which closes next Tuesday.

With a 15.6 per cent rental returns, the DMO was optimistic that it would be oversubscribed like previous offers.

 Oniha explained 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.

“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.

“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 raised from the new Sukuk would 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 (FCT).