FG woos investors, says investing in FGN securities is profitable and risk-free – DMO
The Debt Management Office (DMO) says that Nigerians are advised to invest in the various federal government securities as they are cost effective and risk free.
DMO Director General Patience Oniha said this in an interview with News Agency of Nigeria on Tuesday in Abuja.
Oniha said that the various Federal Government of Nigeria (FGN) securities, in addition to raising funds to finance government projects, also provide attractive investment opportunities for Nigerians.
According to Oniha, the federal government, through the DMO, issues the bonds and pays periodic interest to investors, while the principal is paid at the end of each term.
“The Federal Government has various investment platforms like FGN Bond, FGN Savings Bond, Treasury Bills, Green Bond, Soveriegn Sukuk and Eurobond.
“One of the functions of these FGN securities is to raise capital to finance budget deficits, as well as to raise funds to execute critical infrastructure projects.
“They are backed by the full faith and credit of the Federal Government of Nigeria, and are risk free,” she said.
She said FGN securities have also contributed to the development of the national capital market, adding that they serve as a benchmark for other private institutions to issue their own securities.
“They improve people’s savings and investment opportunities, thereby promoting financial inclusion.
“They are also attracting foreign investors to the domestic financial market, to refinance maturing domestic debt and diversify sources of federal government funding.
“You can use them as collateral to get loans from banks and other financial institutions, and they help diversify the investment portfolio.
“They’re also a source of regular income, as investors’ interest is paid every six months or every three months, and they’re tradeable on the stock exchange,” she said.
“FGN Bond is the flagship product; it is the longest of the existing FGN titles. It offers medium and long-term investments, from five years to seven years, 10 years, 20 years and 30 years.
“It is offered monthly, with a minimum subscription of N50 million, and in multiples of N1000 thereafter, and coupon payment is made every six months.
“The second product, the FGN Savings Bond, is designed for retail investors.
“It is issued monthly, with a minimum subscription of N5,000 and in multiples of N1,000, subject to a maximum of N50 million,” Oniha said.