BY PETER EGWUATU & NKIRU NNOROM
The Debt Management Office, DMO, weekend, disclosed that in a new move to seek long term financing for government spending, it would be diversifying the debt instruments available in the Nigerian long to medium term market and investor-base, through the issuance of Diaspora bond instrument that will target Nigerians abroad.

This, along with Federal Government of Nigeria, FGN, bonds will be offered in Global Depository Notes, GDN, format.

DMO’s Director-General, Dr. Abraham Nwankwo, said: “Arrangements are being finalised to raise US$100 million for Diaspora Bond targeted at infrastructure by 2014.

“There are plans for the installation of an automated information technology platform for the FGN Debt Securities Market, which is expected to further enhance market efficiency in the domestic debt market.”

He stated that the focus of public debt engagement in Nigeria will remain to maximise benefits from the domestic market and International Capital Market, ICM, to motivate the private sector to mobilise stable capital for funding of real sector and infrastructure projects.

He said that the Federal Government would no longer rely on ways and means to fund its deficits budget, which was an inefficient means of managing the nation’s debt profile.

The government, through ways and means, can borrow not more than five per cent of its annual budget from the Central Bank of Nigeria, CBN, to finance annual budget. Federal Government raised sovereign bond worth N544.06 billion to fund the 2013 budget deficit.

Nwankwo, who spoke at the opening of a two-day workshop in Badagry, LagosState, said that N744.44 billion was used to fund fiscal deficit in 2012, while N852 billion was also raised in 2011 for the same purpose against N1.36 trillion in 2010.

The Director-General further said that before the resuscitation of the sovereign bond market, government borrowing from the domestic market was mainly in the form of 91-day treasury bills.

Four Nigerian banks, according to him, took advantage of the sovereign benchmarks, established in the International Capital Market, ICM, to raise $1.85 billion (N290.45 billion).