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    Thursday, November 24, 2022

    DMO: We've Raised N3.3trn to Finance 2022 Budget Deficit

    The Debt Management Office (DMO) said it raised N3.3 trillion from the domestic market to help the federal government finance the 2022 budget deficit.

    Patience Oniha, director-general of DMO, disclosed this at a press briefing in Abuja on Wednesday.

    Oniha said the agency’s efforts to raise funds from the domestic market would not crowd out the private sector.

    According to the DMO boss, the agency was allocated N3.56 trillion in revenue to finance the 2022 budget deficit.

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

    Responding to whether there are plans to borrow to fund the 2023 budget, Oniha said borrowing could be hamstrung at the domestic and global markets due to tightened measures.

    “It is difficult to predict the outcome of the market ahead of 2023, which is Nigeria’s election year. But we have also issued N100 billion Sukuk offer for subscription,” she said.

    On Monday, the DMO opened an offering for a 10-year N100 billion Forward Ijarah (Lease) Sukuk instrument at a rental rate of 15.64 percent per annum, payable half-yearly.

    Oniha said the bond offerings are designed to improve the road infrastructure, develop the financial market and also promote financial inclusion.

    According to Oniha, the Sukuk bond is significant in the sense that it provides the opportunity to raise that quantum of funds just for roads and bridges.

    “The Sukuk has become a product that sells itself, but we will be happy to have a lot more people invest in it.

    “We have several other products that both local and foreign investors can invest in, but the Sukuk has an added advantage in that it is financing infrastructure, driving retail investors and promoting financial inclusion.

    “We are developing the financial market and also giving Nigerians more investment opportunities, ” she said.

    She added that the Sukuk is a product that Nigerians are demanding.

    “Even the contractors are interested because they want to work, and once they are assured of payment they go to site and begin to work,” she said.

    Babatunde Fashola, minister of works and housing, recently announced that 44 road projects are currently funded under the Sukuk program.

    Sukuk is an Islamic liquidity management instrument used by many governments and corporations to finance big projects.

    Since the establishment of Sukuk instruments in September 2017, DMO has issued four Sovereign Sukuk — 2017 (N100 billion), 2018 (N100 billion), 2020 (N162.557 billion), and 2021 (N250 billion).

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