The Debt Management Office (DMO), acting on behalf of the Federal Government of Nigeria (FGN), has announced an opportunity for Nigerians to invest in two Federal Government bonds worth a total of N300 billion. These bonds are part of the government’s plan to borrow money locally to fund budget deficits and support infrastructure development across the country. The auction for these bonds will take place on March 24, 2025, and successful investors will need to complete their payments by March 26, 2025.

What Are These Bonds?

The DMO is offering two types of bonds for Nigerians to invest in:

1. N200 billion – 19.30% FGN APR 2029 (5-Year Bond): This bond will mature in 5 years, meaning investors will get their full investment back in April 2029.
2. N100 billion – 19.89% FGN MAY 2033 (9-Year Bond): This bond will mature in 9 years, meaning investors will get their full investment back in May 2033.

These bonds are “re-opened,” which means they were issued before, but the government is now offering more of them for sale. The interest rates (called coupon rates) for these bonds have already been set, so investors will earn a fixed amount of interest over time.

Key Features of the Bonds

• Price: The bonds are sold at N1,000 per unit. The minimum amount you can invest is N50,001,000, and you can buy more in multiples of N1,000.
• Interest Payments: Investors will receive interest payments twice a year (semi-annually). This provides a steady income stream for those who invest.
• Repayment: The bonds will be fully repaid (bullet repayment) on their maturity dates. For example, if you invest in the 5-year bond, you will get your full investment back in April 2029.
• Tax Benefits: These bonds are tax-exempt, meaning you won’t have to pay taxes on the interest you earn. This makes them especially attractive to pension funds and other institutional investors.
• Liquidity: The bonds are listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange. This means you can easily buy or sell them if you need cash before the maturity date.
• Security: The bonds are backed by the Federal Government of Nigeria, making them a very safe investment. The government guarantees that you will get your money back with interest.

Why Should Nigerians Invest in These Bonds?

1. High Interest Rates: The 5-year bond offers a 19.30% interest rate, while the 9-year bond offers 19.89%. These rates are very competitive compared to other fixed-income investments like savings accounts or treasury bills.
2. Steady Income: With interest paid twice a year, these bonds provide a reliable source of income for investors.
3. Tax-Free Earnings: Since the bonds are tax-exempt, you get to keep all the interest you earn without worrying about deductions.
4. Low Risk: Because the bonds are backed by the Federal Government, they are considered one of the safest investments you can make.
5. Liquidity: If you need cash before the bond matures, you can easily sell it on the Nigerian Exchange or FMDQ.

How to Participate in the Auction

If you’re interested in investing, here’s what you need to know:

• The auction will take place on March 24, 2025.
• You can submit your bids through authorized primary dealers. These are financial institutions approved by the DMO to help investors buy government bonds.
• Successful bidders will need to pay for their bonds by March 26, 2025.

Why Is the Government Issuing These Bonds?

The Federal Government is borrowing money through these bonds to fund important projects and manage the country’s finances. Specifically, the money raised will help:

• Finance budget deficits (when the government spends more than it earns).
• Support infrastructure development, such as building roads, schools, hospitals, and other projects that benefit Nigerians.

By investing in these bonds, you’re not only earning a good return on your money but also contributing to the development of Nigeria.

This is a great opportunity for Nigerians to invest in a safe and profitable way. Whether you’re an individual looking for a steady income or an institution like a pension fund, these bonds offer attractive benefits, including high interest rates, tax exemptions, and low risk. If you’re interested, make sure to contact an authorized primary dealer to participate in the auction on March 24, 2025.

Investing in these bonds is not just good for your wallet, it’s also a way to support the growth and development of Nigeria.