Buhari obtains N3.23tr domestic loan, adding to N42.84tr debt
By Jeph Ajobaju, Chief Copy Editor
Muhammadu Buhari has obtained new N3.23 trillion loan from the domestic market to fund the 2022 federal deficit, adding to existing N42.84tr debt, and counting.
He exceeded his borrowing target by N1.26 trillion in the first eight months of the year to August (8M 2022), increasing both domestic and foreign loans which had totalled N42.84 trillion in the second quarter (Q2 2022).
Debt Management Office (DMO) Patience Oniha announced the new borrowing in Abuja at a briefing on N100 billion Sukuk loan deployed for road infrastructure.
She disclosed the DMO has raised N612 billion through Sukuk since it was introduced in September 2017.
“We raised all of those monies for roads and bridges and there are signs around them so that Nigerians can see them and hold us accountable for the utilisation of the proceeds,” Oniha said.
“The first time we did Sukuk, we had to undertake road shows to five states and held bilateral meetings to convince members of the public to invest in the product but since then, the instrument has become very acceptable to Nigerian public
“The fact that people can see the roads and bridges that are being constructed by Sukuk when they drive around, has helped a lot. Sukuk has a product that is selling itself.”
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Promoting financial inclusion
“We are happy to reach a lot more people to invest in the Sukuk. We have a lot of products that are available to all investors, local and foreign, including retail investors, but Sukuk has the added advantage that it is financing infrastructure.
“We are driving retail investors and promoting financial inclusion, meaning those who have investible funds but having no securities that are acceptable for them to invest in find the Sukuk that product that they can invest in and earn some money,” Oniha explained, according to reporting by Vanguard.
“So overall, we are specifically borrowing to fund infrastructure and developing the market and giving people more investment opportunities.”
Oniha said Nigerians are asking for Sukuk but the DMO put N100 billion on offer because it was already very close to its domestic borrowing limit of about N3.5 trillion for the current fiscal year.
In her view, there is a lot of excitement around Sukuk because road infrastructure creates jobs and adds value to socio-economic development, a “win-win situation” for all members of the public.
“Our focus is those people who ordinarily won’t invest either for reasons of ethics or they are not even aware that their money, though not big, can buy Sukuk.
“Or some who say, ‘I want to give my money to the government but I want to see what they are doing with my money.’ Sukuk is just the right product.”