“Invest and Earn”: FG Invites Nigerians to Purchase Bonds and Earn in Dollars, Lists Conditions
- The Nigerian government has commenced the issuance of $500 million domestic dollar bonds for eligible investors
- The Debt Management Office (DMO) FAQ document listed several criteria for intending investors in the domestic dollar bond
- The document said eligible investors must have a Bank Verification Number (BVN) and National Identification Number (NIN)
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The Nigerian government has said that those seeking to invest in its latest financial instrument must provide specific identification requirements to participate in the exercise.
The government disclosed this in a Frequently Asked Questions (FAQs) document provided by the Debt Management Office (DMO).
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Those qualified to participate in the bond
The FAQ said all Nigerians, including those in the diaspora, must have a Bank Verification Number (BVN) and a National Identification Number (NIN) to subscribe to the domestic dollar bond, issued on Monday, August 19, 2024.
The bond is part of a broader $2 billion initiative issued locally as the government seeks $500 million from local and foreign investors in the first part.
Qualified participants include Nigerians living in the country, Nigerians abroad with foreign currency savings abroad, and foreign institutional investors.
The DMO document reads:
“A BVN and NIN are required for subscription. Nigerians in diaspora can apply for BVN and NIN if they don’t already have them.”
No cash payment is required
A Punch report says that the DMO's FAQ also stated that subscriptions to the Domestic Dollar Bond cannot be made in cash.
The DMO said all payments must be made via electronic transfers into approved accounts.
It also said that subscriptions to the bond can be made electronically or via financial institutions.
Bank balances in domiciliary accounts intended for the bond must have been in those accounts for at least 30 days before the application date.
According to reports, the bonds would finance essential sectors of the Nigerian economy based on the approval of the President or the Minister of Finance.
Benefits of the domestic dollar bond
The bond is tagged at 9.75% per annum and is spread over five years. It targets domestic and international investors, with a minimum of $10,000.
The domestic dollar bond differs from the usual Eurobonds, mainly in accessibility, as it has a lower subscription rate of $10,000 compared to the $200,000 needed for Eurobonds.
The bond meets the Central Bank of Nigeria's criteria as liquid assets and is suitable for inclusion in banks’ liquidity ratio, calculations and pension portfolios.
According to reports, the DMO disclosed that income from the bonds is exempt from several forms of taxes, including Companies Income Tax, Personal Income Tax, and Capital Gains Tax.
Bonds to be used for development
The bonds’ auction will remain open until August 30, 2024, to allow investors enough time to participate in the offering.
The maturity date, when investors will have their purchases confirmed and interest will begin accruing, is September 6, 2024.
Reports say the minister of Finance and coordinating minister for the Economy, Wale Edun, disclosed earlier that the domestic dollar bond will boost external reserves and stabilise the FX situation in Nigeria.
FG invites Nigerians to invest in savings bonds with N1,000
Legit.ng earlier reported that DMO unveiled a new opportunity for subscription to two Federal Government of Nigeria (FGN) savings bonds, priced at N1,000 per unit.
The DMO disclosed this in a statement released on Monday, August 7, 2024, in Abuja.
These savings bonds are designed specifically for retail investors, ensuring a quarterly interest payout and full principal repayment upon maturity.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
