Nigeria’s June Savings Bond Opens with 17% Yields — But Can Retail Appetite Hold?

The Federal Government of Nigeria has opened its June 2025 Savings Bond offer to retail investors, dangling competitive interest rates amid mounting concerns over domestic borrowing and inflationary pressure.

According to the Debt Management Office (DMO), the two offerings include:

A 2-year bond maturing June 11, 2027, with an annual interest rate of 16.121%.

A 3-year bond maturing June 11, 2028, at a higher 17.121% yield.

The offer, which opened on June 2 and will close on June 6, is designed to attract Nigeria’s growing pool of retail investors with an entry-level investment of ₦5,000. The instruments are listed on the Nigerian Exchange and backed by the full faith of the Federal Government.

Rising yields, rising debt

The high coupon rates reflect the government’s continued reliance on domestic borrowing to plug fiscal shortfalls. Nigeria’s debt service burden remains a point of concern, particularly as the federal budget faces increasing constraints from subsidy reforms and oil revenue volatility.

Yet, the yields are attractive in an environment where inflation hovers around 33.69%, making real returns marginal at best.

Retail investors gaining ground

Unlike Treasury Bills, FGN Savings Bonds target the average Nigerian: low-entry thresholds, quarterly coupon payments, and tax exemptions for pension funds make them an appealing “set-and-forget” asset for middle-class savers.

Still, retail penetration remains limited. Despite being designed for inclusivity, many potential investors lack access to financial advisors or awareness about government-backed instruments beyond fixed deposits.

A liquidity tool for banks, a signal for markets

The bonds also qualify as liquid assets, helping banks meet their liquidity ratios — a subtle but important indicator of how the Central Bank is shaping market behaviour through its debt issuance schedule.

The offering closes just ahead of mid-year financial planning season for many institutions, potentially drawing short-term interest from portfolio managers and cooperatives seeking fixed-income plays in an uncertain equity market.