- Urges statesÂ to embrace more strategic ways in public finance managementÂ
By Ndubuisi Francis in Abuja
The federal government has offered for subscription a two-year and three-year Savings Bonds to investors at 13.535 per cent and 14.535 per cent, respectively from August 7 to August 11, 2017.
A statement from the Debt Management Office (DMO) said the two-year bond would be due in August 2019, while the three-year bond has a maturity date of August 2020.
The offer has a minimum subscription of N5,000 with increases thereafterÂ in multiples of N1,000 up to a maximum subscription of N50 million.
According to the DMO, the bond is backed by the full faith and credit of the federal government, with quarterly coupon payments to bondholders.
The DMO stated that the savings bond would help broaden the countryâ€™s funding base.
The FGN Savings Bond is targeted primarily at retail investors to enable them contribute to the development of the country, while also earning good returns on a safe investment in a sovereign instrument.
The FGN Savings Bond was launched by the DMO in March 2017 and is issued every month through stockbroking firms trading on the Nigerian Stock Exchange.
The FGN Savings Bond is promoting the savings culture in the country and enhancing financial inclusion.
Since its introduction in March, the FGN Savings Bond has attracted a lot of new investors to the FGN Securities market with its attractive features.
The income earned on the FGN Savings Bond is exempted from taxes and it can be traded in the secondary market on the Nigerian Stock Exchange.
Meanwhile the DMO has advised states to embrace more strategic ways in their public finance management in the face of a drastic drop in oil revenue.
Its Director-General, Ms. Patience Oniha, handed down the admonition when the Edo State Governor, Mr. Godwin Obaseki, paid her a congratulatory visit in Abuja over her recent appointment.
Oniha said the huge drop in oil revenue which has led to a heavy reduction in allocation to the various tiers of government had recommended a new strategic and innovative ways in public finance management.
Her words: â€œPreviously, we could rely on funds from Federation Account Allocation CommitteeÂ (FAAC)Â and in addition to that, we could borrow both at the federal and the state levels because there was no challenge. But I think the times have changed. Revenues are under severe pressures; we are still dependent on oil, non-oil revenues are picking up, but that is still a journey.
â€œSo it means now, and in future, we need to do things so much differently. We must be more strategic in the management of public finance so the language I always use in my previous work where I was at the Efficiency Unit is that itâ€™s no longer business as usual. We canâ€™t collect money from FAAC, borrow, continue and wait until the next month. So at various levels, we need to be more strategic and more creative in the things that we do.â€
While welcoming Obaseki and his team, Oniha said she was gladdened by the visit of her state governor, even as she applauded Edo State for being fully compliant in its obligations, including filing required data promptly to the DMO.
In his remarks, Obaseki noted that Nigeria is saddled with a serious challenge considering its huge debt profile and debt service obligation.
According to him, being conversant with the federal governmentâ€™s balance sheet, there was no doubt that the nation has a huge challenge vis-Ã -vis its debt profile.
But he expressed confidence that the appointment of Oniha to superintend over the affairs of the DMO at a time like this was one of the best steps taken by the government.
He stated that managing Nigeriaâ€™s debt at this critical period required someone who is clear-headed and unquestionably competent like the new DMO chief executive.
Onihaâ€™s appointment, he added, was propelled by two factors – Godâ€™s divine intervention and her competence, stressing that nobody lobbied for her to get the job.
Obaseki urged the top management team of the DMO to support Oniha to succeed in her new task for the benefit of the nation.