Economy
Reigniting Investors’ Interest in FGN Savings Bond
Investors’ participation in the Federal Government of Nigeria (FGN) Savings Bond has not been impressive since the introduction of the Bond in March 2017 despite the increase in the coupon rate (interest rate) on the Bond.
The amount allotted dropped consistently from N2.07billion in March 2017 to N400.57million in July 2017.
The total number of investors in the FGN Savings Bond also dropped from 2,575 in March 2017 to 779 in July 2017.
The coupon rate on the 2-year Bond which was 13.01% in March 2017 stood at 13.39% in July 2017 while the coupon rate on the 3-year Bond which was 13.79% in April, the first time a 3-year bond was issued, stood at 14.39% in July 2017. There is a need for all the stakeholders in the Bond to reignite investors’ interest in it.
In March 2017, the Debt Management Office (DMO), on behalf of the FGN, introduced the monthly FGN Savings Bond (FGN SB) as part of its efforts to promote the savings culture in Nigeria and improve financial inclusion, particularly amongst retail investors.
The Bond also provides additional funding for the government and helps to broaden the country’s funding base.
It offers guaranteed return in the form of a fixed quarterly interest payment. The minimum investment is N5,000 while the maximum investment is N50million. Investors can subscribe to the Bond through their preferred stockbroking firms on a monthly basis. Some of the important features of the Bond are: income earned on the Bond is exempted from tax payment; it can be traded in the secondary market on the floor of The Nigerian Stock Exchange (NSE); it is backed by the full faith and credit of the FGN; it commands a higher interest rate (coupon rate) than the traditional savings account in banks; the Bond is acceptable as collateral for loans by banks and it serves as good savings towards retirement, wedding, school fees, house projects, etc.
Between March 2017 and July 2017 a total amount of N5.15billion was raised through the FGN Savings Bond. The highest amount allotted so far was N2.07billion in March 2017 while the lowest amount was N400.57million in July 2017.
The coupon rates for the August 2017 offer are 13.535% and 14.535% for the 2-year Bond and 3-year Bond respectively. This means that the August Bond issues carried higher coupon rates than the July issues and represent the highest coupon rates since inception. The persistent increase in the coupon rates has not attracted enough subscription to the Bond despite the steady decrease in the inflation rate in the country since January 2017.
One of the factors we can attribute to this development is the rally that dominated the equity market in Nigeria since the introduction of the Bond in March 2017.
The Nigerian Stock Exchange All Share Index (NSE ASI) appreciated by 51.47% between March 01, 2017 and August 9, 2017. Many retail investors diverted funds to the equity market to take advantage of capital appreciation.
Other factors are: the low awareness of the benefits and characteristics of the Bond; the low liquidity of the Bond at the secondary market and the high yield on the Nigerian Treasury Bill (NTB).
The following strategies can be adopted to increase investors’ participation in the FGN Savings Bonds: The DMO and the Stockbrokers can organize investors’ roadshows in various cities and schools across the country. This will be an avenue to directly engage retail investors on the need for them to hold the Bonds in their investment portfolio.
They can start with a pilot scheme in Lagos, Abuja, Port Harcourt and Kano. The DMO can work with some identified large corporate organizations that have large number of employees to encourage their employees to invest in the Bonds on a monthly basis.
The DMO can also work with government agencies to encourage civil servants to invest in the Bond. We believe these strategies should be able to attract a minimum of 1million subscribers on a monthly basis.
If this is achieved and the monthly subscription amount increases, the overall weighted average interest rate on the FGN debt will drop.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
By Adedapo Adesanya
The crude oil market was mixed on Wednesday as investors weighed revived expectations of a de-escalation in United States-Iran hostilities.
Brent crude futures gained 9 cents or 0.11 per cent to trade at $79.45 a barrel, while the US West Texas Intermediate (WTI) crude futures fell by 55 cents or 0.73 per cent to $75.22 per barrel.
US President Donald Trump previously said there was an “all-day negotiation” with Iran, characterizing the talks positively while also threatening to hit the country “really hard” if a deal was not reached.
Meanwhile, Iran denied that peace talks were under way. Its Foreign Ministry said on Wednesday that Iran and Oman have reached an understanding on how to manage the Strait of Hormuz.
It was reported that the decision was awaiting a decision from Iran’s supreme leader after Iranian and Omani negotiators completed a draft agreement that could reopen the Strait of Hormuz, the main export route for Persian Gulf oil and LNG. Also, a joint announcement is being finalized.
The proposed temporary arrangement would direct ships entering the Persian Gulf through waters controlled by Iran, while vessels leaving the Gulf would use a route administered by Oman. The agreement would revive parts of the US-Iran memorandum reached in June, which collapsed after attacks on shipping resumed.
Reuters reported that Iran is seeking payments equivalent to between 5 per cent and 7 per cent of cargo value, while Oman has proposed a 3 per cent charge.
However, the Trump administration has rejected any arrangement requiring ships to pay Iran for passage through what was an open international waterway before the war.
Crude stockpiles rose by 2.5 million barrels to 407 million barrels last week, data from the Energy Information Administration (EIA) showed on Wednesday. Previously, the American Petroleum Institute (API) estimated that crude oil inventories in the US rose by 2.69 million barrels in the week ending July 30.
Apart from disruption in the Gulf, a surge in attacks on Russian and Ukrainian ships, ports and export terminals in the Black Sea is disrupting global commodity supplies.
Disruption has spread to the Caspian Pipeline Consortium (CPC), the main export route for Kazakh crude oil, which has repeatedly suspended operations this week because of safety concerns and a lack of tankers.
By Aduragbemi Omiyale
Between $30 billion and $50 billion in investments are anticipated from 22 major offshore projects by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) from now till 2030.
Speaking at the Society of Petroleum Engineers’ Nigeria Annual International Conference and Exhibition (NAICE 2026) in Lagos on Wednesday, the chief executive of NUPRC, Mrs Oritsemeyiwa Eyesan, said since 2022, successive licensing rounds have opened access to some of Nigeria’s most prospective oil and gas acreages.
She made reference to the recent 2025 Licensing Round where 31 companies emerged successful bidders for 37 oil and gas blocks after progressing through a robust, data-driven and technology enabled evaluation process.
Mrs Eyesan said the 2026 Licensing Round, which is set to commence soon, is showing greater promise thanks to the transparency that has characterised licensing rounds.
“With preparations already underway for the 2026 Licensing Round, Nigeria is demonstrating that investment certainty is no longer an aspiration; it is becoming an enduring feature of our regulatory framework,” the NUPRC boss stated.
The agency’s chief, who was represented at the event by the Executive Commissioner for Development and Production, Mr Enorense Amadasu, the expected investments are expected to increase production, create jobs and strengthen energy security.
“Since 2024, the NUPRC has approved over $57 billion in Field Development Plan (FDPs) some of which have translated to Final Investment Decisions. Twenty-two major offshore projects are expected between 2026 and 2030 with an estimated investment potential of $30–50 billion.
“Beyond increasing production, these investments will create jobs, expand infrastructure, strengthen energy security and reinforce Nigeria’s position as a leading global upstream investment destination,” she stated.
She noted that besides developing its proven reserves, Nigeria is building a resilient energy future by maintaining a strong pipeline of exploration opportunities that will sustain long-term growth and energy security.
Mrs Eyesan said infrastructure deficit continues to undermine Africa’s promising potential, stating that, Nigeria is, however, addressing this challenge through a series of strategies.
“We are expanding gas gathering systems, processing facilities, pipelines and export infrastructure, while promoting shared facilities, open access, third party access and field tiebacks to reduce costs, speed up project delivery, maximise the use of existing infrastructure and help bring stranded oil and gas resources into production,” the NUPRC boss stated.
Besides these infrastructure strategies, Mrs Eyesan said stronger collaboration among government, security agencies, operators, host communities and private partners; as well as the Host Community Development Trust had led to an improvement in the protection of critical energy assets which had ultimately made Nigeria’s upstream sector more resilient.
