Nigeria’s Debt Management DMO, said it has raised N160 billion bonds at its second debt auction this year at yields lower than the inflation rate. The DMO had initially wanted to raise N110 billion at the auction but increased the offer due to demand. Total demand stood at N337.03 billion as at Wednesday’s auction, higher than N235.05 billion at its previous sale.
Annual inflation in Nigeria climbed to high of 18.72 percent in January, its 12th straight monthly rise. The trend was worsened by dollar shortages, which triggered its first recession in 25 years.
The government is also facing funding challenges brought on by the low price of oil. It expects the budget deficit to widen to N2.36 trillion in 2017 as it tries to spend its way of out of the recession. More than half of the deficit will be funded through local borrowings, the government has said.
DMO said it raised N70 billion of the paper maturing in 2036 at 16.77 percent, lower than 16.99 percent same instrument fetched at the previous auction and paid 16.61 percent for the N30 billion raised in the paper maturing in 2026 compared to 16.99 percent at the previous auction. It issued N60 billion in the note maturing in 2021 at 16.55 percent against 16.89 percent at the previous auction.
