Nigeria Offers New Savings Bonds at Attractive Rates Amid Economic Uncertainty

In a bid to bolster domestic investment, Nigeria’s Debt Management Office (DMO) has announced the availability of two new Federal Government savings bonds, each offered at a starting price of N1,000 per unit. These bonds present an opportunity for Nigerians to invest in government-backed securities with competitive interest rates, especially in a time of economic uncertainty.

According to a statement released by the DMO on Monday, the first offering is a two-year Federal Government of Nigeria (FGN) savings bond, set to mature on August 21, 2026, with an interest rate of 17.373% per annum. The second offering, a three-year bond, will mature on August 21, 2027, and carries an interest rate of 18.373% per annum.

The subscription period for these bonds opens on August 12 and closes on August 16, with settlement slated for August 21. The interest, or coupon payments, will be disbursed quarterly, specifically on November 21, February 21, May 21, and August 21.

Investors can subscribe at a minimum of N5,000, with additional investments to be made in multiples of N1,000. The maximum subscription allowed is N50 million. The DMO assures potential investors that these bonds are secure, backed by the full faith and credit of the Federal Government of Nigeria, and are chargeable upon the nation’s general assets.

“These bonds qualify as securities where trustees can invest under the Trustee Investment Act. They are also considered government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act, offering tax exemption benefits for pension funds and other investors,” the DMO statement read.

In addition, the bonds are listed on the Nigerian Exchange Limited, making them liquid assets that can be factored into banks’ liquidity ratio calculations, thereby enhancing their appeal to institutional investors.

For those interested in subscribing to these bonds, the DMO has advised contacting one of the appointed stockbroking firms listed on its website. With the government’s promise of bullet repayment—where the principal sum is paid in full upon maturity—these bonds present a relatively secure investment option, especially in the current economic climate.

This move by the DMO underscores the government’s ongoing efforts to engage the local market and encourage savings, providing a buffer against economic volatility while also contributing to national economic growth. As the subscription period opens, investors will have to weigh the bonds’ attractive interest rates against other market opportunities, considering the broader economic conditions.