FG Invites Nigerians To Invest in Savings Bonds With Only N5k, Offers 18.44% Interest Rate

• The Debt Management Office (DMO) has opened subscriptions for two savings bonds available for citizen investment
• The two bonds, on behalf of the federal government, are available for subscription at N1,000 per unit
• FGN Savings Bond is a debt security (liability) of the FGN backed by the 'full faith and credit' of the federal government and no default risk

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Debt Management Office (DMO) has announced that two savings bonds from the federal government of Nigeria are available for subscriptions at N1,000 per unit.

In a statement, the Debt Management Office (DMO) announced that the first offer is a two-year FGN savings bond, maturing on November 13, 2026, with an interest rate of 17.440% per annum.

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The second offer is a three-year FGN savings bond due November 13, 2027, at an interest rate of 18.440% per annum.

Details of the savings bond

The opening date for the offer is November 4, 2024, the closing date is Friday, November 8, 2024, and the settlement date is November 13, 2024, while coupon settlement dates are February 13, May 13, August 13, and November 13.

Part of the DMO statement reads:

"“They are offered at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 after that, subject to a maximum subscription of N50 million.

“Interest is payable quarterly while bullet repayment (principal sum) is on the maturity date."

DMO advises investors

The FGN savings bonds are fully backed by the credit and assets of the Federal Government of Nigeria (FGN).

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Punch reports these bonds are eligible securities for trustee investments under the Trustee Investment Act.

They also qualify as government securities under the Company Income Tax Act and the Personal Income Tax Act, offering pension funds and other investors tax exemptions. Additionally, the bonds are listed on the Nigerian Exchange Limited and count as liquid assets for banks’ liquidity ratio calculations.

The DMO advises interested investors to contact one of the appointed stockbroking firms for further information.

Nigeria’s dollar bond becomes worst-performing

Meanwhile, Legit.ng earlier reported that Nigeria's dollar bonds were among the worst-performing emerging-market assets, with its sovereign-risk premium rising to an eight-month high.

Certain investors might be concerned about a comparable result in Nigeria, where the implementation of President Bola Tinubu's policies has caused suffering for the populace.

According to strategists Alexander Rozhetskin and Luis Costa of Citigroup Inc., political commotion and a difficult reform environment are affecting the pricing of Nigerian bonds.

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Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng