A Stockbroker, Mr Abiodun Fagbohun, has said that Debt Management Office designed the Federal Government of Nigeria (FGN) bond to accommodate small-time, retail investors.
Fagbohun, the Chief Executive Officer of the stockbroking firm of the Federal Government, CSL Stockbrokers Limited, said on Friday in Abuja.
Fagbohun spoke against the backdrop of the FGN Securities Issuance Awareness programme being organised by the DMO and CSL.
DMO and CSL had held the awareness programme in Lagos, Enugu, Ibadan, with the next one scheduled for Kano on June 28.
According to Fagbohun, the DMO, along with the stockbroking community, is trying to ensure that the general public can participate in the bond market.
He said that what existed in the past were mostly institutional markets like banks and pension fund administrators taking advantage of the FGN products.
“We now created this window through the FGN Savings bond, whereby retail investors with as low as N5, 000 can also participate in the market.
“For example, if you put about 10,000 in your savings account, you will earn like two per cent interest per annum.
“But with the FGN Savings bond, you can earn between nine per cent and ten per cent interest per annum.
“It is a good opportunity which was not there for the retail investors before now,’’ he said.
He said that holding the programme in parts of the country was informed by the need to take the awareness close to the people.
“We have been to Lagos, Enugu and Ibadan. We will be in Kano next week informing the general public about the availability of this product and how it works,’’ he said.
According to Fagbohun, response to the awareness programmes has been positive adding that all that is needed is improvement on the publicity.
“We should let people know about the product and also make it easy for them to subscribe,’’ he said.
He said that the idea of the Federal Government borrowing through the various FGN securities was not a problem, provided the borrowings were judiciously utilised.
“nobody has a problem with debt. Households take loans; businesses take loans. Such debts should be used for infrastructure projects and for the productive sector of the economy.
“The government has to make sacrifices, and ensure fiscal, prudence and continue to ensure that scarce resources are judiciously allocated,’’ he said.