DMO Offers Two FGN Savings Bonds at ₦1,000/unit

The Debt Management Office (DMO) has officially opened subscription for two Federal Government of Nigeria (FGN) savings bonds, priced at ₦1,000 per unit, targeting retail investors nationwide. This new offering aims to provide Nigerians with accessible investment opportunities backed by the full faith and credit of the Federal Government.

The two savings bonds are designed to appeal to retail investors seeking secure, fixed-income investment options with attractive interest rates. The first bond matures in two years on June 11, 2027, offering an annual interest rate of 16.121%, while the second bond is a three-year instrument maturing on June 11, 2028, yielding 17.121% per annum.

In a statement shared via its official X (formerly Twitter) handle on Sunday, the DMO announced that subscription opened on June 2, 2025, and will close on June 6, 2025, with the settlement date set for June 11, 2025. The government guarantees quarterly interest payments on September 11, December 11, March 11, and June 11 each year until maturity, at which point the principal amount is repaid in full.

Subscribers can invest a minimum of ₦5,000, with subsequent investments in multiples of ₦1,000. The maximum subscription limit is ₦50 million per investor, allowing both small-scale and high-net-worth individuals to participate. The bond’s affordability and guaranteed returns are expected to stimulate increased retail participation in government securities, a key strategy for domestic debt management.

The DMO emphasized that these savings bonds are fully backed by the Nigerian government and are secured against the country’s general assets. This backing provides a strong safety net for investors concerned about credit risk.

Moreover, these FGN savings bonds qualify as government securities under the Company Income Tax Act and Personal Income Tax Act, making them exempt from certain taxes. Pension funds and trustees can invest in the bonds, which are also listed on the Nigerian Exchange Limited (NGX), ensuring liquidity and tradability in the secondary market.

Banks benefit as these bonds qualify as liquid assets under liquidity ratio calculations, incentivizing financial institutions to hold them as part of their portfolio.

Despite these attractive terms, investor interest in short-term government securities has been somewhat tepid in recent auctions. The DMO’s May 2025 auction raised ₦295.98 billion from a ₦300 billion target, with a significant preference shown for longer-term bonds.

Notably, the five-year FGN bond maturing in April 2029 was undersubscribed by approximately 83%, signaling a cautious approach by investors toward medium-term debt amid prevailing economic uncertainties.

Nevertheless, the Federal Government has relied heavily on the domestic bond market to finance its growing budget deficit, estimated at ₦13 trillion for 2025. So far, in the first quarter of 2025 alone, the government has borrowed around ₦1.94 trillion from bond investors.

The DMO’s latest savings bond offering represents a crucial step to deepen Nigeria’s domestic debt market and encourage retail investment in government securities. With guaranteed quarterly interest payments, tax incentives, and a relatively low entry point, these bonds offer an appealing alternative to traditional savings accounts and other fixed-income options.

Experts suggest that increased retail participation will help diversify Nigeria’s investor base, reduce reliance on short-term borrowing, and foster a more sustainable debt profile.

Interested investors can subscribe through authorized dealers and financial institutions across Nigeria. The DMO encourages investors to take advantage of this opportunity to secure long-term, government-backed returns while contributing to the nation’s economic development.

Established to manage Nigeria’s debt portfolio efficiently, the DMO plays a pivotal role in borrowing, debt servicing, and public debt management strategies. It ensures that government borrowing aligns with the country’s fiscal policy objectives while maintaining investor confidence.

Summary

Two FGN savings bonds offered at ₦1,000/unit

Two-year bond at 16.121% p.a., three-year at 17.121% p.a.

Subscription opens June 2, closes June 6, 2025

Minimum subscription ₦5,000; max ₦50 million

Quarterly interest payments, principal repaid at maturity

Bonds listed on NGX and exempt from certain taxes

Bonds backed by full faith and credit of Nigerian government

This latest offering from the DMO is a timely opportunity for Nigerian investors seeking safe, attractive returns amid a challenging economic environment.