The Debt Management Office (DMO) issued a call to investors on Thursday, urging them to seize the opportunities presented by the Federal Government of Nigeria (FGN) savings bonds, which are offered at a minimum investment amount. The call was made during the FGN Securities Awareness Programme held in Lagos, organized in collaboration with CSL Stockbrokers Limited, the stockbroking firm for the Federal Government.
The awareness programme, which commenced in Lagos in March 2022, has since been taken to various cities including Enugu, Ibadan, Kano, Yola, Umuahia, Gombe, Osogbo, Port Harcourt, and Benin.
Patience Oniha, the Director-General of the DMO, emphasized that the FGN Savings Bond is designed to cater to retail investors, who can invest as little as N5,000. Speaking on behalf of Oniha, Mr. Oladele Afolabi, the Director of Portfolio Management at the DMO, highlighted the risk-free nature of the savings bonds, backed by the Federal Government. He emphasized the importance of investing in instruments that offer good returns and high levels of safety to contribute to the country’s development.
Oniha stated, “While there are other saving instruments the Federal Government provides, this particular one affords the opportunity to retail or small investors to take advantage of. This also means the government is standing strongly behind the instruments irrespective of the minimum amount of 5,000, and is as strong as other bonds running into billions. The FGN Savings Bonds can also be used as collateral to access credit facilities in other banks.”
Richard Akinmoladun, the Head of Property Trading at CSL Stockbrokers Limited, highlighted that the awareness program aimed to inform retail investors about the unique qualities of bonds and raise awareness about investment in securities. Akinmoladun emphasized that investing in these bonds would provide funding support for the Federal Government to drive essential infrastructural development in the country.
He explained, “The purpose of FGN Securities is to raise capital to finance deficits in the FGN’s budget. It also helps to raise funds to execute critical infrastructural projects and contribute to the development of the domestic financial markets. It also enhances the savings and investment opportunities of the populace, thereby promoting financial inclusion and attracting foreign investors into the domestic financial markets.”
The benefits of investing in these bonds include safety, visible collateral, diversification of investment portfolios, steady income, and liquidity. Akinmoladun highlighted that the FGN Savings Bond, a fixed-income security targeted at retail investors, offers guaranteed quarterly interest payments. He emphasized that a significant portion of assets in the portfolios of pension asset managers is invested in FGN bonds due to the safety provided by these instruments.
Ifeoma Ukunna, the Head of Retail Business at CSL, encouraged investors to diversify their asset classes to mitigate risks associated with investment portfolios. She emphasized that the FGN Savings Bonds offer stable and fantastic yields with very low risks. Ukunna noted that the bond serves as a safeguard against Nigerians falling into the trap of investing in Ponzi schemes.
Ukunna concluded, “The FGN Savings Bond yields a fantastic return with very low risk, but the returns outweigh some of the instruments in the asset classes. If your rented property and other investment instruments are not yielding good incomes, the FGN savings bond is a good way to keep afloat. Individuals looking to invest should note that all banks are investment agents for the FGN Savings Bonds, and they can also take advantage of brokers’ online platforms to begin the process.”
