FG Secures N4.5 Trillion for 2024 Budget Deficit -DG, DMO

The Debt Management Office (DMO) announced yesterday a significant achievement in the government’s financial strategy, having successfully raised N4.5 trillion of the N6 trillion required to address the 2024 budget deficit. Ms. Patience Oniha, Director-General of the DMO, emphasized the critical role of the domestic securities market in this accomplishment, highlighting the government’s continued reliance on this market for borrowing.

WhatsApp Image 2024 05 21 at 17.41.48

FG Secures N4.5 Trillion for 2024 Budget Deficit -DG, DMO

The announcement came during an engaging discussion with Primary Dealers Market Makers (PDMMs) in Lagos. Ms. Oniha also revealed that the DMO has raised N4.905 trillion out of the N7.3 trillion approved by the National Assembly for the securitization of Ways & Means advances. This indicates substantial progress in securing funds necessary for various government financial obligations.

Read Also: Don’t destabilise Rivers State for your selfish gains, pro-democracy group tells LG Chairmen

“With your support, we have raised N4.5 trillion of the N6 trillion needed for new borrowing for the 2024 budget,” Ms. Oniha stated. “For the Ways & Means advances, we have secured N4.095 trillion out of the N7.3 trillion approved by the National Assembly as of Friday. There is still a balance to be raised, and we will monitor the situation throughout the year.”

The DMO’s reliance on the domestic securities market underscores its importance as a primary funding source for the federal government. Ms. Oniha reflected on the resilience and robustness of this market, particularly during challenging times such as the COVID-19 pandemic. “We must acknowledge the collective efforts we have made over the years. During the COVID-19 pandemic, many countries were unable to access international capital markets, but we successfully raised the necessary funds to meet the budget requirements, and this trend has continued.”

She elaborated, “Last year, we raised N7 trillion from the domestic market, which demonstrates the size, resilience, and sophistication of our market—a contrast to the situation in some other African countries.”

The achievements of the DMO are a testament to the strength and potential of Nigeria’s domestic financial markets. The successful raising of such substantial funds domestically not only highlights the market’s capacity but also its critical role in sustaining government operations and funding public projects.

The Nigerian domestic securities market has been pivotal in ensuring that the government meets its financial obligations without excessive reliance on foreign capital markets, which can be volatile and uncertain. This strategy has provided stability and predictability in government financing, crucial for long-term economic planning and development.

Ms. Oniha’s discussion with the PDMMs also served as a platform to express gratitude and reinforce the importance of their continued collaboration. The PDMMs play a vital role in the success of the DMO’s operations, acting as intermediaries in the securities market and ensuring efficient transactions.

The securitization of Ways & Means advances, which involves converting short-term borrowing into long-term debt, is a strategic move to manage the country’s debt profile better. By raising N4.095 trillion of the N7.3 trillion approved, the government is on track to achieve a more balanced and sustainable debt structure. This approach not only reduces the immediate burden on government finances but also spreads out repayment obligations over a longer period, providing fiscal breathing room.

The emphasis on the domestic market also aligns with broader economic goals of deepening the local financial markets and reducing dependency on external borrowing. A vibrant domestic securities market attracts local and international investors, enhances financial inclusion, and contributes to economic stability.

In conclusion, the DMO’s recent successes in raising funds for the 2024 budget and securitization of Ways & Means advances reflect a well-coordinated financial strategy aimed at leveraging domestic resources effectively. This approach ensures that Nigeria remains resilient in the face of global financial uncertainties, securing a stable financial future for the nation. The continued collaboration between the DMO and market participants will be crucial in maintaining this positive trajectory, ensuring that the government can meet its financial commitments while fostering a robust economic environment

Leave a Reply

Your email address will not be published. Required fields are marked *