The Debt Management Office (DMO) of Nigeria has recently announced the launch of the October 2024 Federal Government savings bond offer, which includes two distinct bond series aimed at providing competitive interest rates to investors. This opportunity is available within a specific subscription window running from October 7 to October 11, 2024. The first series is a two-year FGN savings bond set to mature on October 16, 2026, offering an attractive interest rate of 17.084 per cent per annum. The second series is a three-year FGN savings bond, maturing on October 16, 2027, with an even higher interest rate of 18.084 per cent per annum. These bonds are structured to deliver regular income to investors, with interest payments scheduled quarterly throughout the year.
Investors are encouraged to subscribe to these bonds with a minimum investment of N5,000, which can be increased in multiples of N1,000, allowing for subscriptions up to a maximum threshold of N50 million. This flexible investment option makes the bonds accessible to a wide array of investors, from small savers to large institutional investors. The DMO emphasizes the bonds’ liquidity, as they are listed on The Nigerian Exchange, allowing those who wish to trade the bonds before their maturity date to do so easily. This feature enhances the appeal of the savings bonds by providing an exit strategy for investors who may need to access their capital.
The DMO has highlighted that these bonds qualify as government securities under the Trustee Investment Act, which makes them an excellent choice for trustees and pension funds seeking stable, long-term investments. Additionally, the bonds are recognized as government securities under the Company Income Tax Act and Personal Income Tax Act, thereby granting tax exemptions for pension funds and other eligible investors. Such regulations underscore the secure and compliant nature of these investment products, attracting a diverse investor base while aligning with Nigeria’s regulatory framework for capital markets.
One key attribute of these savings bonds is that they are backed by the full faith and credit of the Federal Government of Nigeria, instilling confidence in potential investors regarding the safety of their investments. This government backing is crucial for risk-averse investors seeking low-risk avenues for capital preservation while yielding decent returns. The appeal of these savings bonds lies not only in their attractive interest rates but also in the reassurance of government support, which remains a significant factor influencing investment decisions in emerging markets.
In the recent past, the performance of previous bond offers has been promising, as evidenced by the recent figures reported for the Federal Government’s savings bond for September 2027 that attracted a remarkable N2.75 billion in subscriptions, reflecting a coupon rate of 18.20 per cent. Simultaneously, the two-year FGN savings bond maturing in September 2026 raised N843.58 million through 418 successful subscriptions, showcasing the keen interest of investors in these savings products. Such statistics demonstrate a strong demand in the market, indicative of investor confidence and the efficacy of the DMO in mobilizing domestic savings through accessible financial instruments.
For those interested in participating in the bond offer, the DMO has urged potential investors to reach out to authorized stockbroking firms for detailed subscription information or to visit the DMO’s official website for further guidance. This step is crucial as it provides a pathway for investors to familiarize themselves with the bond offerings and the procedures for subscribing. With the backdrop of a favorable investment climate and appealing interest rates, the October 2024 Federal Government savings bond offer represents a strategic opportunity for both individual and institutional investors looking to diversify their portfolios while capitalizing on the benefits of government-backed securities. In summary, these new offerings promise regular income, capital security, and market liquidity, making them a noteworthy addition to Nigeria’s investment landscape.
