Economy

2nd Green bond over-subscribed, showing serious public commitment – DMO

Written by Maritime First

…As Don calls for single digit lending rate, if Buhari will take 100m people out of poverty***

The Debt Management Office (DMO) indicated Thursday that the results of the second Sovereign Green Bond demonstrates greater commitment from the public towards protecting the environment.

The organisation said this in a statement on Thursday in Abuja, declaring the results of the auction which opened on June 3 as over -subscribed.

According to the statement, total value of subscriptions received was N32.93 billion, representing 220 per cent of the N15 billion offered.

It said that the issuance revealed increased knowledge and awareness of green bonds by subscribers.

“Similarly, the number of subscribers doubled when compared to the figure for the first Sovereign Green Bond issued in December 2017.

“Retail investors were not left out, as the number of individuals who subscribed for the second Sovereign Green Bond more than doubled.

“The amount of subscriptions grew by almost 201 per cent with the share of total subscriptions rising to 1.43 per cent compared to 0.67 per cent for the 2017 Sovereign Green Bond.”

It said that the stronger participation of retail investors showed that financial inclusion and deepening of the domestic financial market were being achieved.

The statement added that while the offer was oversubscribed, the DMO allotted only the N15 billion that was offered for a tenor of seven years, at a coupon of 14.50 per cent per annum.

It, however, said that the proceeds of the green bond would be used to finance projects in the 2019 budget, which would contribute to Nigeria’s commitments to the Paris Agreement on Climate Change.

The projects include Off-Grid Solar and Wind Farm, Irrigation, Afforestation and Reforestation and Ecological Restoration.

Assisting the DMO with this offering were the financial advisors, Chapel Hill Denham Advisory Limited, Capital Assets Limited, Rand Merchant Bank Nigeria Limited and Stanbic IBTC Capital Limited.

Meanwhile, a Don, Dr Austine Nwaeze, on Thursday stressed the need for reduction of current lending rate to single digit, if the Federal Government is to achieve its target of lifting its proposed 100 million Nigerians, out of poverty in the next 10 years.

Dr Nwaeze, who lectures in Economics at the Pan Atlantic University, Lagos made the suggestion in Lagos.

A revered economist, he observed that the government should persuade the apex bank to cut down lending rate from 13.5 per cent to single digit, to boost the productive sector.

Recall that President Muhammadu Buhari said that the Federal Government will lift at least 100 million Nigerians out of poverty in the next 10 years.

The president said this during his inaugural address for a second term in office on Wednesday in Abuja.

He said his administration would henceforth begin to lay the foundation for accomplishing the poverty reduction goal by offering a leadership with a sense of purpose.

According to Nwaeze, if the Federal Government must achieve such a laudable programme, there is need for more support for the SMEs.

“The monitoring authorities must lower the rate to one single digit to enable commercial banks issue cheaper funds to prospective businesses.

“A single digit rate is what many of the advanced economies of the world adopt to boost their businesses and tackle poverty,” he said.

“The government reforms in the ease of doing business must be sustained to encourage growth, while multiple taxes by the tiers of government should be addressed.”

Nwaeze said that the N5, 000 reduction in the registration fee of businesses should be extended to 2021 from 2020.

He said the government could pull millions of Nigerians out of poverty by implementing many of the innovations from our agricultural research institutes.

According to him, this will encourage more Nigerians to venture into agriculture and make a living out of it, as well as make the country to be food sufficient.

He advised that since the President had four years to stay in office, the party should sell the idea to his successor for the policy to be implemented to the letter.

 

 

 

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Maritime First