By Emele Onu, with agency report, 07.16.2010 

                  

Nigeria will sell the biggest amount of bonds -N315 billion worth ($2.1 billion) in at least four quarters in the three months through October as it seeks to finance projects amid unstable crude oil revenue, Afrinvest (West Africa) Ltd. said.

 

These bonds according to Bloomberg news, would be sold in the third quarter, according to a schedule published on the website of the country’s Debt Management Office. That’s the most since at least the three months through June last year, data from the website show.

 

Nigerian President Goodluck Jonathan had on April 22 signed a N4.6 trillion ($30.6 billion) budget that marks a jump in spending from 2009 as the government steps up investment in infrastructure. The budget is almost 50 per cent bigger than the original spending plans for 2009 and 33 per cent up when a supplementary budget approved in December is included. The plan envisages a deficit of N1.52 trillion and is based on an average oil price of $67 a barrel.

 

“There was instability in oil prices, which made it difficult for the government to meet its expected revenue,” a bond analyst with Lagos-based Afrinvest, Babatunde Obaniyi,  said by phone from Lagos yesterday. “The government is emphasising building infrastructure, which requires a lot of funding.” This year, oil traded as high as $87.15 a barrel on March 3 and as low as $64.24 on May 20.

 

Nigeria plans to sell N867.5 billion of bonds this year to fund a budget deficit due to a drop in oil revenue, director-general of the Debt Management Office, Abraham Nwankwo, said on Feb. 12.The nation will hold auctions on July 21, Aug. 18 and Sept. 22, the Debt Management Office said. It will sell N35 billion of bonds maturing in three, five and 20 years at each sale.

 

Demand for Nigeria’s three- and 20-year bonds climbed to the highest level in three months at a government sale on June 23 in which N80 billion of debt was sold, the Debt Management Office said.

 

(Source:ThisDay)