The Debt Management Office (DMO) has opened subscriptions for two new Federal Government of Nigeria (FGN) savings bonds at N1,000 per unit, targeting retail investors amid weakening demand for short-term bonds.
The first is a two-year bond maturing on June 11, 2027, offering an annual interest rate of 16.121 percent. The second is a three-year bond maturing on June 11, 2028, with a higher yield of 17.121 percent per annum.
Despite investor apathy for shorter-term instruments, the DMO is proceeding with the offer to raise funds for the government, ensuring quarterly interest payouts and full principal repayment at maturity. The offer opened on June 2 and will close on June 6, with settlement scheduled for June 11. Coupon payments will be made quarterly—on September 11, December 11, March 11, and June 11.
Subscriptions start at a minimum of N5,000 and must be in multiples of N1,000, capped at N50 million per investor. The DMO emphasized that the bonds are backed by the full faith and credit of the federal government, qualifying as trustee investments and enjoying tax exemptions under both the Company Income Tax Act and the Personal Income Tax Act.
The bonds are also listed on the Nigerian Exchange Limited (NGX) and count as liquid assets for banks’ liquidity ratio calculations.
The announcement comes after a poor performance at the May 2025 FGN bond auction, where the DMO raised only N295.98 billion of its N300 billion target. Demand for five-year bonds maturing in April 2029 was particularly weak, with an 83 percent undersubscription rate.
Still, the federal government continues to rely on the domestic bond market to fund its spending. In the first quarter of 2025 alone, it borrowed N1.94 trillion from bond investors as part of efforts to finance a N13 trillion budget deficit.
