Economy
Investment Opportunities in FGN Savings Bond
By FSDH Research
Have you ever considered how much money you could create from that your little N5,000? And most times, a lot of people blow it off, by spending it on frivolities. An adage says ‘a little drop of water makes a mighty ocean’.
The Federal Government of Nigeria Savings Bond (FGNSB), just like a mutual fund, is an instrument the FGN uses to mobilize savings from low income earners for developmental purposes.
In return for investing money in the FGNSB, the FGN, through the Debt Management Office (DMO), pays interest (coupon) to the investor every 3 months.
In our previous report entitled ‘Policies to Increase National Disposable Income’, we noted that there is low savings in Nigeria compared with some other countries.
The culture of low savings is one of the reasons why the interest rate on loans is high in Nigeria. In order to increase national savings, more people need to be encouraged to save their money in addition to providing an enabling environment to create jobs so that more people can earn income from which they can save and invest.
Before the FGN introduced the Savings Bond in March 2017, the government had two major securities to borrow money from the Nigerian public: FGN Bonds and Nigerian Treasury Bills (NTBs).
The minimum amount required to invest in these two securities is now significantly higher than what most low-income earners can afford.
However, with the introduction of the FGNSB, which requires a minimum investment of N5,000, more people are able to invest part of their income and earn returns from it.
Although the FGNSB is listed on the Nigerian Stock Exchange (NSE), allowing investors who need money before maturity to sell and receive cash, it is not actively traded on the NSE.
Therefore, mutual funds might be more attractive because investors may turn their investments into cash more easily than the FGNSB.
The DMO, on behalf of the FGN, issues the FGNSB on the first week of every month and it is open for 5 working days. In order to buy the FGNSB, the investor must approach a DMO-licensed stockbroker to act on his or her behalf.
The Savings Bond has the full support of the FGN and, as a result, returns are always paid regardless of the state of the economy.
Due to this, the FGNSB is one of the few types of financial investments in Nigeria that has minimal risk. This further shows that the FGNSB is a very good investment opportunity for low-income earners who do not want to expose their investment to excessive risk.
In addition, the FGNSB is also exempted from payment of all forms of taxes.
There are two different kinds of FGNSB: the one that takes 2 years before the principal is paid back to investors (known as the 2-year FGNSB) and the one that takes 3 years before the principal is paid back to investors (known as the 3-year FGNSB).
Fixed interests are paid once every 3 months (quarterly). Thus, for a 2-year FGNSB, interest is paid 8 times while interest is paid 12 times for a 3-year FGNSB. The average interest rates (coupon rates) on the 2-year and 3-year FGNSB are 11.20% and 12.20% respectively since inception, which are both higher than the savings account interest rate which is 4.13%.
Investment in FGNSB is another way to make your money work for you 24 hours a day non-stop, just the same way your investment in a mutual fund, which is managed by a professional fund manager, works for you 24 hours a day non-stop.
Our illustration shows that an investment of N100,000 in the FGNSB could grow to N1,582,382.48 in 25 years. This is possible if the interest earned and the maturing principal are reinvested at an interest rate of 11.20% annually payable every quarter.
By Adedapo Adesanya
The National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.
The director-general of the pension regulator, Ms Omolola Oloworaran, speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, said the commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.
She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.
According to her, the commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.
“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.
Ms Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.
She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.
The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.
She said the policy was intended to widen investment opportunities for pension funds without compromising safety.
Using Stanbic IBTC as an example, Ms Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.
“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.
By Aduragbemi Omiyale
Analysts at Meristem Research have predicted that the inflation rate for June 2026 in Nigeria should marginally rise to 15.95 per cent on a year-on-year basis from the 15.93 per cent reported in May 2026.
The National Bureau of Statistics (NBS) is expected to release inflation numbers for last month later today, Wednesday, July 15, 2026.
In its report sighted by Business Post, Meristem Research said it expects inflationary pressures to re-emerge across key economies in the near term, as the re-escalation of the US-Iran conflict has reignited upward pressure on global oil prices.
It disclosed that this marks a sharp reversal from most of June, when the ceasefire between the two countries helped drive oil prices lower, raising expectations of some relief on the inflation front.
With conflicts now flaring up again, oil prices are likely to increase again, and the anticipated easing in energy-driven inflation may not materialise as broadly as earlier envisaged.
“Nonetheless, some relief is likely from the food segment, where robust supply conditions across major producing regions and softening demand should continue to ease food price pressures,” it stated.
The team also explained that it projected a 15.95 per cent inflation rate because of the lingering effects of persistent food price pressures.
“However, we expect core inflation to moderate as the sharp reversal in energy prices begins to filter through to transportation, distribution, and other energy-related costs, easing underlying price pressures.
“On a month-on-month basis, the combined effect of lower petrol prices, a relatively stable Naira, and the gradual pass-through of reduced energy costs across the supply chain should exert further downward pressure on inflation.
“Based on our assessment, food inflation is expected to remain the key swing factor, as seasonal pre-harvest supply constraints are likely to offset some of the gains from lower logistics costs,” it said.
By Adedapo Adesanya
The duo of Central Securities Clearing System (CSCS) Plc and Afriland Properties Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.61 per cent on Tuesday, July 14.
CSCS Plc saw its stock value drop N9.08 to close at N82.40 per share compared with the preceding session’s N91.48 per share, and Afriland Properties Plc slid by 17 Kobo to sell at N15.00 per unit versus N15.70 per unit.
The losses recorded by the two securities pulled back the market capitalisation by N41.64 billion to N2.546 trillion from N2.587 trillion, and cracked the NASD Security Index (NSI) by 69.36 points to 4,242.31 points from 4,311.67 points.
It was observed that the exchange witnessed two price advancers during the session, led by FrieslandCampina Wamco Nigeria Plc, which gained N1.37 to end at N151.37 per share compared with the previous day’s N150.00 per share, and Food Concepts Plc chalked up 5 Kobo to settle at N2.50 per unit versus N2.45 per unit.
The volume of securities traded by market participants surged by 50.7 per cent to 13.7 million units from the previous 9.1 million units, while the value of securities went down by 79.7 per cent to N65.2 million from N320.4 million, and the number of deals crashed by 3.6 per cent to 27 deals from the previous session’s 28 deals.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc, which exchanged 2.3 billion units valued at N6.5 billion, and CSCS Plc with 73.9 million units transacted for N5.2 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
