(Ecofin Agency) - In Nigeria, the Debt Management Office (DMO) has raised N105.96 billion ($307.5 million) by selling a 5, 10 and 20-year local currency bond at an auction on Wednesday to fund the 2017 budget.

According to the debt office, the amount raised was less than the N135 billion ($391.6 million) it had planned to issue at the auction.

A total of N47.01 billion in 10-year paper was raised at a rate of 16.25% compared to the 16.19% at last month's auction while N55.05 billion in 20-year bond was sold at 16.25%, against the previous 16.19%. Also the office sold N3.90 billion in five year debt at 16.24%.

“The low demand for the 2021 bond was a reflection of the level of liquidity in the market and the pricing of the bond which was lower than the prevailing rate at the secondary market,” a senior fixed income dealer told Reuters.

The issuing of bond 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 slumped last year into its first recession in 25 years. As a result, a budget deficit of N2.36 trillion was forecast for this year.

Anita Fatunji