According to the Debt Management Office (DMO), the federal government Savings Bond auction held this month raised ₦1.367 billion, bringing the total amount raised this year to ₦8.824 billion.
Investors contributed ₦451.037 million to the two-year Savings Bond, which was issued at an interest rate of 8.075 per cent, and ₦915.865 million to the three-year paper, which was issued at a rate of 9.075 per cent per annum.
The DMO’s FGN Savings Bond is specifically designed for retail investors and to encourage financial inclusion, with investors able to invest as little as ₦5,000. The DMO raised ₦1.874 billion from the Savings bond last month.
In June, 701 retail investors invested ₦769.92 million in the two-year savings bond, which was raised at 8.205 per cent, and 621 investors invested ₦1.104 billion in the three-year bond, which was raised at 9.205 per cent.
In May of this year, a total of N1.106 billion was raised, with investors putting ₦748.45 million and ₦358.01 million in the three and two-year bonds raised at 8.934 per cent and 7.934 per cent, respectively.
Between January and April of this year, the DMO raised ₦4.47 billion through the FGN Savings Bond, compared to ₦3.33 billion in the same period in 2021.
The total amount raised from the Savings Bond last year was ₦8.39 billion, a significant increase from the ₦3.63 billion raised in 2020. Due to the Covid-19 lockdown, the Savings Bond auction did not take place for three months in 2020.
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The highest amount raised at the Savings Bond auction this year was ₦2.15 billion in March. Investors’ interest had waned in April after ₦1.13 billion was raised through the bond designed specifically for retail investors.
Patience Oniha, Director General of the DMO, recently encouraged Nigerians to invest in the Savings Bond, which she claims pays more interest than banks in the country. According to her, investing in Federal Government of Nigeria (FGN) savings bonds is a better investment than saving in banks.
Oniha, who was present at the FGN Security Issuance Awareness recently, urged Nigerians to embrace investment in the various FGN Securities to increase their earnings, saying, “savings is a culture we must all imbibe, and the FGN savings bond has come to help Nigerians save”.
“The driving force is to encourage us to save in a secure environment. The Federal Government cannot default on a loan in its currency. The interest rates on FGN securities are higher than what the banks will give you.
With as little as ₦5,000, Nigerians can now invest in FGN savings bonds. It is an avenue through which the government raises funds to develop infrastructure. It also contributes to the development of the financial market, attracts foreign investors into the financial market and enhances savings and investment opportunities of the populace”.