The Director-General of the Debt Management Office, Ms. Patience Oniha, on Thursday said the Federal Government has so far successfully raised N50.2bn from about 35,000 subscribers to the FGN Savings Bonds since its introduction.
FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the DMO for and on behalf of the Federal Government, with the government having an obligation to pay the bondholder the principal and agreed interest as and when due.
Speaking at the 2023 NGX Savings Bond webinar organised by the Exchange in collaboration with Optimus by Afrinvest, a foremost fintech platform, supported by the Debt Management Office (DMO) and CSL Stockbrokers, Oniha commended the NGX for its role in enlightening retail investors of the opportunity that exists in fixed income securities market, especially with respect to the FGN savings bond.
Represented by the Director, Market Development Department, DMO, Monday Usiade, she said the DMO uses the FGN bond benchmark yield curve to price the savings bond to ensure that retail investors earn comparable returns.
Also speaking at the webinar, Jude Chiemeka, Divisional Head, Capital Markets at the Nigerian Exchange Limited (NGX), said total allotments for FGN Savings Bonds in the first five months of 2023 rose to N5.06bn.
Giving a breakdown, he said “FGN Savings Bonds market have remained on the upward trend in the current year (from January to May) with allotments at an average of N1.01 billion (Total allotments from January – May stands at N5.06 billion),”
Chiemeka assured, however, that opportunities exist for further participation by the investing public, noting that the webinar was aimed at creating more awareness on the benefits of FGN Savings Bonds to the investing public especially the retail segment of the market as this would encourage participation in investments and further enhance financial inclusion in the country.
Continuing, he said with inflation remaining “unrelentingly on the upward trajectory (Now at 22.22 per cent as at May) the yields on FGN Savings Bond which are in double digits offers an opportunity for investors to taper negative real interest rates.”
He further explained that the retail savings bond product was introduced by the DMO on behalf of the Federal Government in 2017 to democratise activities in the bond market by making it easily accessible to Nigerians. The introduction, he continued, is part of ensuring continuous development of the domestic market and bridge infrastructure deficit which has been a constraint to economic growth, he revealed that activities in the FGN Savings Bonds market have remained on the upward trend in the current year.
Chiemeka thereafter assured that the Exchange remains keen to offer an efficient, liquid and transparent market for investors and businesses in Africa, to access capital and build wealth while adding that it continue to collaborate with all market stakeholders for the collective growth and development of the capital market in Nigeria.