The Nigerian Debt Management Office (DMO) has announced the commencement of another offering of the Federal Government of Nigeria (FGN) Savings Bond for May 8, 2017, and will be closing on May 12, 2017.
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Nigerian government offers higher rate for its local bond
This is one of the programmes of the Nigerian government aimed at raising funds for infrastructural development financing.
FGN Savings Bond
The FGN Savings bond is a retail investment program aimed at enhancing savings culture among Nigerian while providing all citizens irrespective of income level, an opportunity to contribute to National Development; as well as favourable returns on their investment.
The program which was created in March 2017 had its first offer for subscription in April 2017. The results showed a total of 841 successful for the 2-year bond and 957 for the 3-year bond. The value of the April 2017 subscription by local investors was N1.288 billion.
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Based on information released by the DMO on Monday, May 8, 2017, the May edition of the monthly bond subscription offered higher interest rates than its previous edition. The 2-year bond will be offered at an interest of 13.189% and 14.189% for a 3-year bond compared to 12.794% and 13.794% offer respectively in the April 2017 auction.
On a comparative investment analysis, the FGN Savings bond still offers a lower yield when compared to treasury bills, and may not have total hedge inflation.
As at last week, the FGN one year treasury bills was sold at 18.8% interest.
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