The Debt Management Office (DMO) has announced the opening of the subscription window for the Federal Government of Nigeria (FGN) Savings Bonds for January 2025.
This offering provides an opportunity for both individual and institutional investors to secure consistent and competitive returns.
The subscription period runs from January 13 to January 17, 2025. Investors can choose between two options: a two-year savings bond with a 17.235 percent interest rate, maturing on January 22, 2027, and a three-year bond offering an 18.235 percent interest rate, maturing on January 22, 2028.
Each unit of the bond is priced at ₦1,000, with a minimum subscription of ₦5,000 and the option to increase investments in multiples of ₦1,000, up to a maximum of ₦50 million. The settlement date for successful subscriptions is set for January 22, 2025. Quarterly coupon payments will begin on April 22, 2025, and continue on July 22, October 22, and January 22 each year.
The three-year FGN Savings Bond’s interest rate of 18.235 percent represents a significant increase from the 12.033 percent offered in January 2024. This 6.20 percentage-point rise underscores the Central Bank of Nigeria’s (CBN) ongoing efforts to manage inflation through tighter monetary policy.
In November 2024, the CBN raised its Monetary Policy Rate (MPR) by 25 basis points, bringing it to 27.50 percent, marking the sixth consecutive hike since February 2024. The move aims to address inflationary pressures, which stood at 33.88 percent in November 2024, and stabilise the foreign exchange market.
These higher yields have made Nigerian bonds increasingly attractive to foreign portfolio investors seeking competitive returns, reinforcing Nigeria’s appeal as a destination for fixed-income investments.
The DMO’s December 2024 bond auction demonstrated robust investor interest. The government offered two bonds: the 19.30 percent FGN APR 2029 and the 18.50 percent FGN FEB 2031.
The five-year bond, maturing in 2029, attracted a total subscription of ₦67.457 billion from 44 bids, with 30 bids successfully awarded. A total of ₦51.857 billion was allotted at a marginal rate of 21.14 percent, with bid rates ranging from 19.30 percent to 22.14 percent.
The seven-year bond, maturing in 2031, saw even greater demand, with ₦211.363 billion subscribed from 116 bids. Out of these, 68 bids were successful, resulting in ₦159.287 billion being allotted at a marginal rate of 22.00 percent. Bid rates ranged from 19.00 percent to 24.00 percent.
Altogether, the auction raised ₦211.144 billion, reflecting strong investor confidence in government securities amidst evolving economic conditions.
