Overview

This presentation by Dr. Abraham Nwankwo, Director-General of the Debt Management Office (DMO) of Nigeria, delivered at the Forum on FGN Bonds for Nigerians in Diaspora in London on October 17, 2009, introduces Federal Government of Nigeria (FGN) Bonds as a financial instrument for national development, targeting the Nigerian diaspora as potential investors. The presentation defines bonds as medium-to-long-term debt instruments used by governments and corporates to raise capital, with FGN Bonds specifically being sovereign obligations backed by the full faith and credit of Nigeria. The purpose of FGN Bonds includes financing budget deficits, funding infrastructure projects (power, roads, health, education), elongating the domestic debt profile from short-term to a mix of short, medium, and long-term, developing domestic financial markets through product deepening and benchmark yield curve creation, attracting foreign investors, and supporting President Yar'Adua's 7-point Agenda and Vision 2020. Key features include tenors of 3, 5, 10, and 20 years, semi-annual interest payments, redemption at face value at maturity, listing on the Nigerian Stock Exchange (NSE), and liquidity via the Primary Dealer Market Maker (PDMM) system. Benefits to investors include safety of principal and interest (FGN guarantee), tenor choice, relatively high returns, tax exemption, investment diversification, use as collateral, and suitability for target projects (property, education, retirement). The presentation includes statistics on primary market subscriptions from 2003 to 2009, showing amounts offered, subscriptions, and success rates (e.g., in 2009, N600 billion offered, N422.64 billion subscribed, 70% success rate). The presentation concludes with an expectation of diaspora participation to contribute to national development.

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