Foreigners have invested $5.11b in FG bonds as at December – DMO boss

Director-General of the Debt Management Office (DMO), Dr. Abraham Nwankwo, at the weekend urged Nigerian companies to take full advantage of the agency’s modest achievements in management of the nation’s public debt and awareness created about the country to access both the domestic and international capital market for medium to long-term growth funds.

According to Nwankwo, the Federal Government’s Eurobond, the International Finance Corporation’s Naira-denominated bonds (N12 billion) and domestic bond issuance has helped to among others create benchmarks for borrowing, besides diversifying the holding structure of FGN securities, achieving about 93 per cent non-Central Bank of Nigeria holdings. The balance, he explained, is held by the CBN through its operations in the discount window of the secondary market.

As a result of the diversification, he noted during a retreat in Lagos, “at the end of December 2012, foreign investors’ holdings in FGN securities amounted to $5.112 billion, compared to about $500 million as at end-January 2012.”

According to him, foreign investors’ holding in Federal Government securities, rose from near zero to 19.52 per cent between the first quarter of 2011 to 19.52 per cent at the end last year, while government’s cost of borrowing dropped with the yields falling by about 400 basis points between August and December 2012.

This, Nwankwo explained was besides the increased inflow of foreign exchange, resulting in external reserves growth and stability of the Naira exchange rate against major global currencies.