The Federal Government is targeting retail investors with a new savings bond that would go on sale this month, the Debt Management Office said on Wednesday.
Two- and three-year maturities will be offered, with interest paid quarterly. The interest rate has yet to be announced, but the debt office paid 16.5 per cent on a five-year bond sold to institutional investors last month, Reuters reported.
The bonds will be “good for savings towards retirement, marriage, school fees, house projects,” the DMO said.
Savings accounts at commercial banks pay up to five per cent in interest, but the country’s inflation is running at more than 18 per cent annually.
The bond offer will open on March 13 and end after five days, according to the debt office. New issues will be sold every month. The minimum subscription will be N5,000 and the maximum N50m. The Federal Government depends on local borrowing to fund more than half its budget deficit, which is expected to reach N2.36tn this year.
It issued a $1bn Eurobond last month and is now seeking approval from parliament for an additional $500m Eurobond. Last week, it said it would offer a N20bn “green bond” in April.
The government also plans to sell a $300m Diaspora bond abroad this year and its first sovereign sukuk in the local market.
The Central Bank of Nigeria on Wednesday sold about N310.22bn ($984.83m) of short-dated Treasury bills at an auction.
The CBN has said on Tuesday it was planning to raise N26.14bn in three-month debt, N62bn in six-month bills and N222.08bn in one-year notes, using a Dutch auction system.
Payment will be due the day after the auction.