By Aduragbemi Omiyale
The Debt Management Office (DMO) has disclosed that the federal government has taken N50.2 billion from the sale of FGN savings bonds to retail investors.
The Director-General of the DMO, Ms Patience Oniha, made this disclosure on Thursday during the NGX Savings Bond Webinar 2023 organised by the Nigerian Exchange (NGX) Limited in collaboration with Optimus by Afrinvest, a foremost fintech platform, and support of CSL Stockbrokers.
Ms Oniha, represented by the Director of the Market Development Department at the DMO, Mr Monday Usiade, said these funds were taken from about 35,000 FGN savings bond subscribers.
Commending 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, the DG said that the DMO uses the FGN bond benchmark yield curve to price the savings bond to ensure that retail investors earn comparable returns.
Business Post reports that the retail savings bond product was introduced by the debt office on behalf of the federal government in 2017 to democratise its activities in the bond market by making it easily accessible to Nigerians to ensure continuous development of the domestic market and bridge infrastructure deficit which has been a constraint to economic growth.
Since then, activities in the FGN savings bond market have remained on an upward trend in the current year.
According to the Divisional Head of Capital Markets at NGX, Mr Jude Chiemeka, the total allotments for the retail debt instrument has risen to N5.06 billion in the first five months of 2023.
“FGN Savings Bonds market has 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). However, there remains an opportunity for further participation by the investing public.
“As inflation remains unrelentingly on the upward trajectory (Now at 22.22 per cent as of May), the yields on FGN Savings Bond, which are in double digits, offer an opportunity for investors to taper negative real interest rates,” Mr Chiemeka said.
He, thereafter, said that the exchange remains keen to provide an efficient, liquid and transparent market for investors and businesses in Africa, to access capital and build wealth while adding that it continues to collaborate with all market stakeholders for the collective growth and development of the capital market in Nigeria.
Mr Chiemeka noted that the webinar was aimed at creating more awareness of 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.