Home Business Nigeria Opens Auctions for First Savings Bonds In 2018

Nigeria Opens Auctions for First Savings Bonds In 2018


By Nse Anthony-Uko
(Sundiata Post) — The federal government has already resumed auction of the savings bonds for the year 2018. In a circulation culled from the official website of the Debt Management Office (DMO), the auction opened on Monday and will remain opened to January 12, 2018.
The two year plan, due on January 17, 2020 is offered at an interest rate of 11.098 per cent per annum while the three year plan meant to mature on January b17, 2021 is auctioned at an interest rate of 12.098 per cent per annum.
The FGN savings bonds has N1,000 per unit of sales subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000 while interest is payable quarterly.
These bonds qualify as securities in which trustees can invest under the Trustee Investment Act. 2 as well as government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors and it qualifies as a liquid asset for liquidity ratio calculation for banks. They are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria
Recall that the federal government raised a total sum of N7.3 billion in 10 months from the savings bond introduced in March 2017 to boost domestic investors’ participation in the bond market.
The government is this year, continuing with its plan to use the savings bond to finance the budget deficit.

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