Nigeria’s Debt Management Office (DMO) kicked off its monthly retail debt auction on Monday, inviting subscriptions for two Federal Government of Nigeria (FGN) Savings Bonds totaling up to ₦50 billion, as the government presses ahead with funding needs in a high-inflation environment.
The offering features a 2-year FGN Savings Bond maturing Dec. 10, 2027, priced to yield 12.838% per annum, and a 3-year note due Dec. 10, 2028, at 13.838%.
Subscriptions are open through Dec. 5, with settlement slated for Dec. 10.
Quarterly coupons will disburse March 10, June 10, September 10, and December 10, culminating in bullet principal repayment at maturity.
Units trade at a minimum of ₦5,000, with ₦1,000 increments up to a ₦50 million cap per investor.
The bonds, listed on the Nigerian Exchange Ltd. (NGX), qualify as trustee investments under the Trustee Investments Act and carry tax exemptions for pension funds under the Companies Income Tax Act and Personal Income Tax Act. Banks can leverage them for liquidity ratio calculations.
Backed by the “full faith and credit” of the federal government and charged against Nigeria’s general assets, the securities underscore the sovereign’s commitment to risk-free retail funding.
Investors are directed to DMO-appointed stockbrokers for applications, with the full list available at www.dmo.gov.ng.
The latest tranche arrives as Nigeria’s benchmark yields have softened from August peaks, reflecting central bank easing signals and improved liquidity after the naira’s stabilization efforts.
September’s FGN Savings Bond auction, for comparison, commanded steeper rates of 15.541% on the 2-year and 16.541% on the 3-year.
The December cuts, down 270 basis points on the short end, signal market bets on monetary policy relief, though analysts caution that upcoming 2026 budget implementation could reverse the trend.
“Nigeria’s retail bond program remains a cornerstone for broadening the investor base beyond institutions, especially as real yields turn positive against inflation,” said Chimezie Ugwu, fixed-income strategist at Chapel Hill Denham. “At these levels, the bonds offer a compelling alternative to fixed deposits yielding under 10% after tax.”
Cumulative FGN Savings Bond issuances have surpassed ₦1.5 trillion since the program’s 2017 inception, per DMO data, fostering a savings culture while diversifying funding away from costlier commercial paper.
Secondary market trading on the NGX ensures liquidity, with average daily volumes exceeding ₦200 million in recent months.
As subscription closes Friday, market participants anticipate strong uptake from high-net-worth individuals and cooperatives, buoyed by the bonds’ tax perks and government guarantee. For context, the 10-year FGN benchmark yield eased to 18.5% last week, compressing the curve.
The DMO, established under the 2003 Debt Management Office Act and governed by the Local Loans (Registered Stock and Securities) Act Cap. L17 LFN 2004, continues to steer Nigeria’s ₦121 trillion public debt stock, 53% external, toward sustainable levels. Investors seeking exposure are urged to consult authorized dealers promptly to meet the Dec. 5 deadline.
