The Federal Government of Nigeria, through the Debt Management Office (DMO), has announced the issuance of N120 billion worth of bonds for November 2024. This represents a 33.3% decrease from the N180 billion raised in the previous month, marking one of the smallest bond offerings of the year.
The reduction in November’s bond issuance suggests a possible shift in the government’s borrowing strategy, which could be attributed to either reduced funding requirements or improved revenue inflows.
The bonds are attractive to institutional investors, as they qualify as securities for trustees under the Trustee Investment Act. They also benefit from tax exemptions under both the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), making them particularly appealing to pension funds and other large investors.
Furthermore, these bonds are listed on both the Nigerian Exchange Limited and the FMDQ OTC Securities Exchange, ensuring liquidity and tradability.
Although the November offering is lower, the total allotment for the October bond auction surged to N289.597 billion, reflecting strong investor demand for government securities. The October auction also saw a significant rise in marginal rates, driven by investor expectations of higher yields in response to ongoing inflation concerns and tighter monetary policies.
