The Debt Management Office (DMO) said on Friday that the current delays in coupon payments on the June savings bond auction is as a result of system and processing issues and not a pointer to a government’s financial crisis as being feared.
“The delay in the coupon payment is a system process issue that is being addressed.
“All hands are on deck to resolve the issue,” Patience Oniha, DG DMO told BusinessDay.
The government has failed to make the first coupon payment on a two-year and three-year debt issue raised in June for 4.2 billion naira. This marks the second consecutive delay in paying obligations on a savings bond, according to investors.
“ I write to Enquire about non-payment of bond coupons. I Did subscribe for the 17.414 percent June 12th- 2026 FGN saving bond On 5th June 2024, the first quarterly coupon was due on September 12th, 2024, until the date I am yet to receive this payment,” an investor complained on DMO’s Twitter page.
Another Okechukwu Elechi said, “ Please clarify why the first coupon for the June 2024 FGN Savings Bond due on 12th September 2024 hasn’t been paid. Thanks.”
However, there are concerns that the issue is beyond the system process issue rather than the government’s rising debt burden as there was a similar delay (a week) in August.
“Once is understandable. Twice is emblematic of an incipient issue,” a Lagos-based investment analyst said.
But responding to this analyst’s position,, Oniha further told BusinessDay, “No. We certainly could do better. But it’s a system process issue, and this is valid.”
Nigeria’s total debt stock in the first quarter (H1) of 2024 rose to N121.67 trillion, from N97.34 trillion as of December 2023, according to data from the Debt Management Office (DMO).
Godwin Obaseki, Edo State Governor, Godwin Obaseki, had just yesterday said Nigeria was technically bankrupt, and neither had nor earned enough to offset its expenditure, while government spending continues to increase.
Source: Norvaneports