DMO concerns over retail investors participation in debt market

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The Debt Management Office (DMO) has expressed dissatisfaction with individual investors’ patronage of bonds, said a lot needed to be done to attract more investors into the net.

The debt office has also; put Nigeria’s total debt to China as at March 2019, at $2.554 billion, representing 80 per cent of all bilateral loans to Nigeria in terms of bilateral debt.

According to the DMO, the federal government (FGN) savings bond established in May 2017, has so far recorded a total of N13.44 billion investment.

An analysis showed that 431 corporate invested N1.75 billion while 15,822 individuals invested N11.75 billion, bringing the total amount to N13.5 billion.

The head, market development, DMO, Monday Usiade,while addressing participants during the NSE, DMO, Stanbic IBTC Stockbrokers 2019 ‘Retail Bond’ workshop, in Lagos during the week disclosed that 77 per cent of the investors were from the Southwest while eight per cent were from the Federal Capital Territory, and South-South, respectively

Usiade, who was represented by Bose Olafisoye, said four per cent came from the South-East and foreign investors, respectively, while the remaining three per cent were from North-East and North Central, adding that Jigawa and Yobe states recorded zero subscriptions, while Lagos, FCT, Oyo and Ogun contributed 75.54 per cent of the total investment.

A breakdown showed that so far in 2019, N1.02 billion and N1.72 billion were recorded in the first and second quarters (Q1, Q2), respectively.

Last year, the bonds achieved N583 million in Q1, N740 million in Q2, N1.21 billion in Q3, and N1.02 billion in Q4.

At the inception of the offers in 2017, about N2.07 billion, N2.69billion, N1.55 billion, and N891million worth of investments were recorded in Q1, Q2, Q3, and Q4, respectively.

Meanwhile, the DMO had said that China provides loans to build railways, power plants and airports, helping to bridge a huge infrastructure gap in Africa’s largest oil producer, a report by Bloomberg said yesterday.

However, lending from China makes up only three per cent of Nigeria’s total debt stock of $81 billion.

The country’s debt to France stood at $366.07 million; Japan – $74.63 million; India – $26.46 million, and Germany – $171.79 million.

The country’s total bilateral debt stood at $3.192 billion.

Nigeria’s total public debt, comprising the federal government, states and the Federal Capital Territory (FCT) debt stocks stood at N24.947 trillion or $ 81.274 billion as at March 31, 2019, according to data from the DMO. The figures indicated that the external debt also increased by N101.646 billion in three months.

The 2.3 per cent rise contrasts with the figure of N24.387 trillion ($ 79.437 billion) posted as at December 31, 2018.

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