• Breaking News

    FG earns N10.5bn from FGN Savings Bond in 18 months




    THE Federal Government has raised about N10.5 billion from the Savings Bond in the nation’s capital market since it was floated in March 2017.


    The Director General, Debt Management Office, DMO, Patience Oniha, who disclosed this yesterday, however, said the FGN Bond has not actually been met its target.


    Consequently, to enlarge patronage, she informed that the DMO is currently studying the possibility of using phones as used in Kenya by investors to participate directly in the government securities.



    From left: Head of Service, Mrs Winifred Oyo-Ita; Chief of Staff, Alhaji Abba Kyari; Secretary to the Government of the Federation, Mr Boss Mustapha; Vice President Yemi Osinbajo and President Muhammadu Buhari at the Federal Executive Council Meeting.

    Speaking at the second day of the African Securities Exchanges Association, ASEA 2018 Conference and Annual General Meeting, AGM in Lagos, with the theme: “Pathways to Inclusive Growth in Africa , Digital Finance,  Financial Literacy, Inclusion and Democratisation of Wealth”,  Oniha stated: 

    “From the 18 months of the creation of the FGN savings Bonds, we have been able to raise N10.5 billion and attracted 13,200 retail investors into the market. As you know the DMO borrows on behalf of the government. One of our objectives is to be able to issue our securities in a timely manner and at a very minimal cost.”


    While responding to questions on the use of technology in government securities, she said:

     “The issue around what technology can do in terms of raising capital is extremely important to us. We, traditionally for a long term have been serving only a segment of the market, i.e, the institutional investors and foreign investors. There is no buy side from the retail investors because they need to be knowledgeable and familiar to invest in the sovereign bond.


    “So we then try to introduce a retail product and we call it FGN Bond and the most essence of that product is to promote financial inclusion primarily because part of financial system strategy and inclusion is clearly the major objective of that product so as to attract small investors into the market and also use it as a means of mobilizing savings into the financial sector.


    “So we kept the amount very small with N10, 000 really you can buy a saving bond and the securities are short term between two to three years. This was meant to attract the small investors that you can imagine and we backed it up with a bit of investor sensitization and road shows.


    So what has been our experience from March last year when it was introduced up till now which is about 18 months we have been able to raise about N10.5 billion and attracted about 13,200 of those retail investors into those securities. 

    So if you ask, was that our objectives and expectation? Not at all; we had expected to get more especially with the money we spent in advertising and trying to create awareness.


    “So far the experience has told us something. Yes we could attract the segment of the market, ie retail investors into the capital market. Our experience showed that some retail investors that were familiar with equities, but after 2007/8 some of them pulled out from the market. 

    So how else can we bring them in and make them comfortable that their investment is safe and they can access it even when they want it. 

    We them realize that financial inclusion requires a lot of education even though when we issued our sovereign securities, I had people asking me whether I can be able to get my money back.

      That means we have to look into financial literacy and to expose the retail investors into participating in the capital market.”

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