First FGN Savings Bond Closes for Subscription Today

The Federal Government of Nigeria (FGN) Savings Bond, which opened for subscription on Monday, will close today. THISDAY checks showed that investors have been making efforts to ensure they subscribe to the bond before it closes. The savings bond, which is the first to be issued by the federal government, has a minimum subscription amount N5, 000 with additions in multiples of N1, 000, subject to a maximum of N50 million.

To ensure that the offer reaches many subscribers, the Debt Management Office (DMO) has accredited 87 stockbroking firms to distribute the bond.

Market stakeholders have commended the issuance of the bond, saying it is a good development.

For instance, the Executive Director, Capital Market Division, Nigerian Stock Exchange (NSE), Mr. Haruna Jalo-Waziri, said the launch of the bond will boost financial inclusion, adding that it is consistent with NSE’s commitment to grow domestic investor participation in the market.

“The launch of the Federal Government National Savings Bonds is consistent with the NSE’s commitment to grow domestic investor participation in the Nigerian capital market and it is our pleasure to have worked with the DMO and the dealing member community to deliver yet another innovative product that will foster financial inclusion in Nigeria,” he said.

According to him, with an estimated population in excess of 150million, if the targeted audience successfully offtake this product, “we shall be seeing yet another paradigm shift where ordinary Nigerians irrespective of their income levels can pool resources to boost government’s effort to mobilise domestic capital required to fund priority sectors of the economy and ultimately serve as a catalyst for economic growth.”

Also speaking on the bond, the Managing Director/Chief Executive Officer of Arthur Steven Asset Management Limited, , Mr. Olatunde Amolegbe, has urged retail investors to subscribe to it, saying it is one of the safest instruments in the market as it guarantees return of the sum invested as long as one holds the instrument to maturity.

“It also offers very attractive return on investment and is very liquid as it can easily traded on the floor of the Nigerian Stock Exchange at any time that an investors seeks to access cash from the instrument,” he said.

According to him, the bond can reduce the negative impact of inflation, explaining that “if one is able to earn double digit return on his/her investment this will reduce the impact of inflation on the personal wealth considerably.”