The Debt Management Office (DMO) says it is advisable for Nigerians to invest in the various Federal Government Securities, as they are profitable and risk-free.
The Director-General of the DMO, Patience Oniha, said this in an interview with the News Agency of Nigeria on Tuesday in Abuja.
Oniha said the various Federal Government of Nigeria (FGN) Securities, apart from raising funds to finance government projects, also offered attractive investment opportunities for Nigerians.
According to Oniha, the Federal Government, through the DMO, issues the bonds and makes periodic interest payments to the investors, while the principal is paid at the end of each tenor.
“The Federal Government has various investment platforms like the FGN Bond, FGN Savings Bond, Treasury Bills, the Green Bond, the Soveriegn Sukuk and Eurobond.
“One function of these FGN securities is to raise capital to finance deficits in the budget, and also to raise funds to execute critical infrastructural projects.
“They are backed by full faith and credit of the Federal Government of Nigeria, and are default risk-free,” she said.
She said that the FGN Securities also contributed to the development of the domestic capital market, adding that they served as benchmark for other private institutions to issue their own securities.
“They enhance the savings and investment opportunities of the populace, thereby promoting financial inclusion.
“They also attract foreign investors into the domestic financial market, to refinance maturing domestic debt and to diversify sources of funding for the Federal Government.
“You can use them as collateral to obtain loans from banks and other financial institutions, and they help in diversification of investment portfolio.
“They are also a source of steady income, as investors’ interests are paid every six months or every three months, and they are tradable on the stock exchange, ” she said.
“FGN Bond is the flagship; it is the longest of the existing FGN Securities. It offers medium term to long term investments , from five years to seven years, to 10 years, 20 years and 30 years.
“It is offered every month, with minimum subscription of N50 million, and in multiples of N1000 thereafter, and coupon payment are made every six months.
“The second product, the FGN Savings Bond is designed with retail investors in mind.
” It is issued every month, with a minimum subscription of N5,000 and in multiples of N1000, subject to a maximum of N50m ” Oniha said.