By Favour Nnabugwu
The Debt Management Office, DMO has explained the reason behind the N2.13 trillion the Federal Government borrowed in the first two months of the year.
The DMO in a statement said that the N2.13 trillion borrowing comprises N1 trillion to partly finance the budget 2023 deficit of N7.043 trillion, and N1.13 trillion to pay off debts that matured during the period.
The DMO stated: “The attention of the Debt Management Office (DMO) has been drawn to a report which stated that the Federal Government of Nigeria has raised the sum of N2.129 trillion between January and February 2023 through the issuance of Domestic FGN Securities.
“The Report further indicated that at this rate of borrowing, the Government may exceed its domestic deficit funding requirement of N7.043 trillion in 2023. “The DMO wishes to clarify that the Domestic Issuance Programme is designed not only to provide funds to finance the Budget Deficit but to also refinance the FGN’s maturing obligations during the fiscal year.
“Thus, while a total of N2.129 trillion has been raised in January and February from issuances of FGN Bonds, Nigerian Treasury Bills and FGN Savings Bond, only N1 trillion has been deployed for deficit financing, representing 14.2% of the total requirement of N7.043 trillion for the year.
“It should be noted that the balance of the funds raised is for refinancing maturing obligations. While the DMO is maximizing the opportunity provided by the strong investor demand to raise funds to facilitate early implementation of the 2023 Budget, the DMO is always guided by the law and thus, cannot exceed the legally approved New Borrowing in the Appropriation Act.”