Group Managing Director Afrinvest, Abiodun Keripe, has advised the federal government to look outside the capital market to source money for it’s programmes and activities.
He made the remark on the sidelines of the launch of Afrinvest’s 2023 Nigerian banking sector report held in Lagos.
He said by aways going to the capital market to raise money, the government is crowding out the private sector in the capital market because investors would rather invest their money in government, which he said is averaging 15-16 per cent, than give their money out to the private sector because the companies cannot offer competitive rates.
He pointed out that should the private sector attempt to compete with such rates, investors will still opt for government securities because it is difficult for the private sector to pass down such a level of cost of borrowing to their customers.
Data from the Debt Management Office (DMO) shows that investors in the bond market oversubscribed the federal government of Nigeria’s 30-year bonds by over 300 per cent when it was reopened on auction on Monday.
The FGN bond maturing in 2053 recorded a total subscription of N330 billion, surpassing the N90 billion offered by the Debt Management Office of the country.
