FG offers 15.12% as DMO raises Savings Bond yields

The Federal Government has raised the yield on its latest retail savings bond to 15.12 per cent, giving small investors a higher return than the previous month as the Debt Management Office (DMO) seeks to attract fresh funds into government securities.

The September 2026 Federal Government of Nigeria Savings Bond (FGNSB) offer, which opened on September 7 and closes September 11, consists of two-year and three-year instruments carrying annual interest rates of 14.12 per cent and 15.12 per cent, respectively. The bonds will mature on September 16, 2028 and September 16, 2029.

Interest will be paid quarterly on December 16, March 16, June 16 and September 16, while the principal will be repaid in full at maturity.

The September offer represents a modest increase in borrowing costs for the government at the retail end of the fixed-income market. In August, the DMO offered 13.963 per cent on its two-year bond and 14.963 per cent on the three-year instrument.

The latest increase comes despite softer retail demand. The DMO raised N5.86 billion through the savings bond in August, down from N6.19 billion in July, indicating that higher yields may also be aimed at making the instrument more attractive to investors.

The FGNSB is targeted largely at retail investors seeking exposure to a government-backed security with predictable quarterly income. It is sold at N1,000 per unit, with a minimum subscription of N5,000 and additional investments in multiples of N1,000, subject to a maximum subscription of N50 million.

For investors, the higher September rates offer an opportunity to lock in a fixed return over two or three years, while the government benefits by widening access to domestic funding beyond institutional investors.

The securities are backed by the full faith and credit of the Federal Government and are listed on the Nigerian Exchange. They also qualify as government securities under relevant tax laws and as eligible investments for trustees.

The new offer comes against a backdrop of continued heavy government financing needs. The Federal Government’s planned borrowing for 2026 was raised to N29.20 trillion, an increase of N11.31 trillion over the earlier N17.89 trillion projection, following an expansion in the budget and fiscal deficit.

The DMO has also maintained a substantial supply of conventional FGN bonds during 2026, making the savings bond part of a wider domestic borrowing programme aimed at financing the fiscal deficit and refinancing maturing obligations.

The September retail offer is therefore significant beyond its relatively small size. With the government competing for funds in a high-yield domestic market, the 15.12 per cent coupon is an attempt to improve the appeal of government paper to households and smaller investors.

For savers, however, the key consideration is the return relative to inflation, money-market yields and alternative investments. The fixed coupon provides certainty, but the real return depends on how consumer prices move over the life of the bond.

The latest issuance consequently presents a two-sided development: investors receive a higher guaranteed nominal return, while the government accepts a higher cost of retail funding at a time when its overall borrowing requirement remains exceptionally large.

With subscriptions closing September 11 and settlement scheduled for September 16, the level of funds attracted will provide a fresh indication of how strongly Nigerian retail investors are responding to elevated government bond yields.