The Debt Management Office (DMO) has attracted N45. 135 billion retail investments from the issuance of the Federal Government of Nigeria’s Savings Bond (FGNSB) as at the end of 2022, the director-general of the DMO, Patience Oniha, said on Tuesday.
Oniha disclosed this during an engagement with distribution agents and market stakeholders for final demonstration of the FGN securities subscription portal, in Lagos.
“Since its introduction in March 2017, the FGNSB has performed relatively well. Total subscription from 2017 to December 2022 was N45.135 billion with investors coming from the six geo-political zones and the federal capital territory,” Oniha said.
She added that working with the Central Securities Clearing System (CSCS), the portal would be launched in about a month from now, another effort at deepening the nation’s capital market.
She said that the FGBSB had great potential to attract more retail investors and driving the secondary bond market.
“The DMO believes that the product has more potential than what has been achieved so far and has for now, identified two ways to achieve much higher volumes and numbers of investors.
“In 2022 we embarked on investor sensitisation programmes across a number of cities in Nigeria, this strategy proved successful as total subscription almost doubled from N8.396 billion in 2021 to N16.589 billion in 2022.
“Given this outcome, the DMO plans more of such sensitisation, as well as wider publicity.”
Oniha said that DMO would work closely with the CSCS to deploy technology as a major strategy for attracting more investors to the bond market.
“The other strategy is to deploy technology to the process to make the subscription fast, easy and overall, more convenient.
“The CSCS has developed a Portal through which investors can subscribe for FGNSB.
“The DMO has worked with the CSCS to develop the Portal and it has been tested with Distribution agents for the FGNSB,” she added.
The presentation of the portal, she said, was to expose it to a wider group of stakeholders to acquaint them with the portal and obtain their comments to aid the DMO and CSCS.
Oniha further noted that information and communications technology (ICT) has provided convenient means of doing business and that the DMO would leverage on the portal to attract and move investors to the securities market.
Also, young Nigerians would be particularly targeted in that regard, as according to her, the market must move with latest smart technologies to remain relevant and attractive.
“Working with the CSCS, we are adopting strategies to improve investment in the FGN savings bond. We want to elevate the FGNSB to make subscription easy, fast and more convenient,” Oniha explained.
The DMO introduced the FGNSB in March 2017, to enable retail investors participate in the FGN securities market and to promote financial inclusion.
Primary dealers market makers, Central Bank of Nigeria, Securities and Exchange Commission, Nigeria Exchange Limited and stockbroking firms participated in the stakeholders’ meeting.
Haruna Jalo-Waziri, managing director/CEO, Central Securities Clearing System, challenged brokerage firms to set up apps for their organisations, as that would even further attract young investors to the capital market.
A presentation on the FGNSB’s journey so far, indicated that subscribers’ base had hit 31, 675 as of the end of 2022.
The analysis of the developments in the sub-sector also showed a higher appetite for the three-year bond, as against the two-year tenured bond.
In addition, it revealed a strong interest in the FGNSB by diaspora Nigerians who have shown a huge investment appetite for the instrument.
The DMO indicated, however, that the continued demand for higher coupons has been a challenge.
This comes as the DMO says it raised a total of N2.129 trillion in January and February from issuances of domestic Federal Government of Nigeria bonds, Nigerian treasury bills and FGN Savings Bond.
The agency, in a statement on Tuesday, informed that N1trillion of the funds has been deployed for deficit financing, representing 14.2 percent of the total requirement of N7.043 trillion for the year.
It clarified that the domestic issuance programme was designed not only to provide funds to finance the budget deficit but to also refinance the FGN’s maturing obligations during the fiscal year.
“It should be noted that the balance of the funds raised is for refinancing maturing obligations,” it added.
