(Ecofin Agency) - Nigeria’s Debt Management Office (DMO) on Thursday said it raised N2.07 billion ($6.6 million) from a new two-year savings bond meant for retail investors. The operation aimed at expanding the nation’s funding base.

According to the office, the bond, which is to be sold on a monthly basis, registered this month more than 2,500 subscriptions. The DMO added that the next sale will be on April 3. It will have a maximum subscription of N50 million and carries a coupon of 13.01%.

The savings bond issuance is part of the government’s strategy to plug its budget deficit for the year. Indeed, due to a plunge in the prices of oil from which Nigeria gets most of its revenues, the country has slumped last year into its first recession in 25 years. As a result, a budget deficit of N2.36 trillion ($7.5billion) was forecast for this year. To fund this deficit and the economy back on its feet, the government relies mostly on domestic borrowing.

It should be recalled that Nigeria recently got the parliament’s approval for a $500 million Eurobond, following the oversubscription of a $1 billion bond from the international debt market last month. This aims to meet the country’s financial needs as it plans to increase public spending by about 20% this year.

Anita Fatunji