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  Nigeria’s Debt Management Office (DMO) has now made Federal Government Bonds available for subscription this November. In line with this, entities looking to profit from this can subscribe to bonds backed by the Federal Government of Nigeria, and earn quarterly interest of up to 13.464% per annum.
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The DMO, which disclosed this on Monday, November 6, informed the public that the savings bonds for November are 2-year and 3-year bonds, meaning that they would mature two years and three years from issuance respectively, i.e. November 15, 2025, and November 15, 2026.

What is the Federal Government of Nigeria Savings Bonds?

The Federal Government Bonds is a debt security instrument issued by Nigeria’s Federal Government to raise funds from the public. In other words, it is a means by which the Federal Government gets debt funding from various entities which it can use to support public spending (e.g. infrastructure projects).

How Often Can You Purchase a Federal Government Savings Bond?

The Bonds are issued monthly. This article covers the offer for November 2023. If you are unable to take advantage of what’s available for this month, you can subscribe in the months that follow.

What is the Interest Payment on Federal Government Bonds?

The interest payment on the bonds issued this November is 12.464% per annum for the two-year savings bonds, and 13.464% per annum for the three-year savings bonds. Note that the interest payable on this instrument may vary depending on the prevailing market conditions in which it is issued.
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How often will Interest be Paid Out?

Interest accruing from this investment will be paid out quarterly. That is, February 15, May 15, August 15, and November 15.

How Much Does it Cost to Invest in Federal Government Savings Bonds?

Investors need a minimum of ₦5,000 to invest in this bond. Higher sums should be denominated in thousands of naira, e.g. ₦6,000, ₦7,000, ₦30,000, etc. The maximum subscription for this bond is ₦50 million.

Is this Investment Safe?

The Federal Government Savings Bonds are one of the safest investments anyone can make within the formal financial system. It is fully backed by “the full faith and credit of the Federal Government of Nigeria.” The chances that the issuer (the federal government) will default are slim.
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How Can You Invest in this?

If you want to invest in Federal Government Bonds, you can do so via stockbroking firms appointed as distributing agents by the Debt Management Office. Examples include Stanbic IBTC Stockbrokers, FBN Quest, and Afrinvest. You can visit the websites of these firms for further information.

What is the Deadline for Subscribing to the Bond?

The deadline for subscribing to the currently issued savings bond is November 10, 2023. Featured Image Source: National Economy Newspaper
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This article was first published on 8th November 2023

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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