What Are FGN Bonds in Nigeria Explained: How They Work
16 October 2026 - Naira BriefingFGN bonds are longer-term loans you make to the Federal Government — from a couple of years out to ten or more — paying interest along the way. They are a core naira savings and investment tool, and their yields sit alongside interest rates as a signal of where the economy and the exchange rate are heading.
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How they work
- The government borrows — issuing bonds through the DMO and CBN.
- You earn coupons — regular interest payments over the bond’s life.
- Repayment at maturity — the face value returned in naira.
Bonds vs bills, and the naira
FGN bonds are longer than treasury bills, so they lock in a rate for years — attractive when rates are high, riskier if inflation erodes the naira meanwhile. For savers weighing naira yields against dollar protection, this is one side of the naira vs dollar savings question.
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