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Investment in FGN securities profitable, risk-free, says DMO

By JOHNMARK UKOKO

The Debt Management Office (DMO) says it is advisable for Nigerians to invest in the various federal government securities, as they are profitable and risk free.

Director-General of DMO, Patience Oniha, said this virtually, saying apart from raising funds to finance government projects, the various Federal Government of Nigeria’s (FGN) securities also offered attractive investment opportunities for Nigerians.

Oniha maintained that the Federal Government issues the bonds through the DMO and makes periodic interest payments to the investors, while the principal is paid at the end of each tenor.

She also explained that the Federal Government has various investment platforms like the FGN Bond, FGN Savings Bond, Treasury Bills, the Green Bond, the Sobering SUKUK and Eurobond, among others.

“One function of the FGN securities is to raise capital to finance budget deficits and also to raise funds to execute critical infrastructure projects. They are backed by full faith and credit of the Federal Government of Nigeria and default risk-free,” she stressed.

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She further stated that the FGN securities also contribute to the development of the domestic capital market, adding that they serve as benchmark for other private institutions to issue their securities.

“They enhance the savings and investment opportunities of the populace thereby promoting financial inclusion. They also attract foreign investors into the domestic financial market to refinance maturing domestic debts and diversify sources of funding for the Federal Government.

“You can use them as collateral to obtain loans from banks and other financial institutions and they help in diversification of investment portfolio. They are also source of steady income as investors’ interest are paid every six months or every three months and they are trade-able in the stock exchange,” she added.

Oniha said FGN bond is the flagship and longest of the existing FGN securities and that they offer medium to long- term investments from five to 10 years, as well as 20 and 30 years.

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