NGN Deficit 101, 102, 103

Since the last NGN bond issuance, we have been spending some time to understand why DMO, by our calculations having very little debt left to issue this year continues to remain aggressive in the borrowing window. Our first though was to do with the FOMC in the US and their possible rate hike or insinuation, of which we previously wrote our views. However, with a long 9hr road-trip ahead of me and time to kill, I decided to read more around this Euro-bond prospectus provided ahead of the last month issuance.

Please let me refer you to page 16 of the prospectus where all our analysis broke down. Into the year, we had a NGN4.6trn budget deficit, we had a NGN1tr supplementary budget passed, taking us to NGN5.6trn deficit. However, on page 16, we have a NGN6.449trn deficit. Is this a typo error? Well, I tried to put the revenue and expenditure on excel and still got the same NGN6.449trn. So what does this mean? So while me and my learned colleagues are busy expecting another NGN450bn left to issue this year, the number seems to be another NGN1.40trn left to borrow.

Yes we have raised an extra $1bn from the Euro-bond and we might tap it again, but we def have a lot more to borrow than we thought. At this point I will leave the analysis of the market to the more capable and studious minds.

Good luck trading

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