₦airaland Forum

Your assertion is incorrect. WHT can be and is used to offset one's tax liability in a given year because it is an advance payment of income tax.

sirrotex:
Please note that withholding tax on interest or investment is final and can not be used to offset any tax liability

As expected, FGN bond prices have increased (reduced yields) reflecting the introduction and application of WHT on Nigerian Treasury Bills.

I agree re: reduction in the rate (pace) of price increases and I think you meant to say actual drop in prices is called deflation

jedisco:
.....

Actula drop in prices is called devaluation

I understand your point re: people chorusing when rates are/were high.

Some investors took the risk by switching to bonds to lock it higher rates for multiple years which are longer than TBill tenures. High rates benefit investors seeking high yields (currency devaluation risks aside).

That said, in general and regardless of what people may be chorusing about (high or low rates), lower rates support real economic growth notably by reducing the cost of capital investments and borrowing. Some refer to this as to support Main Street economic growth (all things being equal because Nigerian commercial banks don't necessarily bring down borrowing rates sufficiently to reflect levels in the bond market).

Furthermore, my post was simply to highlight what was occurring in the Nigerian bond market (falling yields) not the Nigerian economy

jedisco:
Not against the narrative of your post but it makes me wonder.

Over the past years whenever rates shot up, we had people chorusing how that was the best for the Nigerian economy saying it'd bring foreign investment. When questions were asked where the money to repay would come from, it was rebuffed. Now the rates are dropping, another group is telling us to be happy. Just wondering how we marry the two.

Secondly, if rates start to rise in say 1yr under this government what would folks now telling us low rates are good say?

Quite right ✅👍

emmasoft:
With the way inflation numbers are going, expect lower rates everywhere across all fixed income-related investment windows, but DON'T STOP INVESTING, you can only change strategy, don't stop if you still want to win in this investment game

Quite right

Odunharry:
People locking in it at current rate before they see decrease in rate.. September bid was oversubscribed by 500%.

Omo

skydiver01:
Meanwhile, FGN bond prices have been going up (reducing yields) while the Naira has also been slowly appreciating

https://x.com/PBATSignal27/status/1975247460957130999

"Why the Drop in FGN Bond Yields Signals a Stronger Economy

When people ask, “Has the FGN Bond dropped again?” they often assume it’s bad news. After all, lower yields mean lower returns for investors, right?

Not necessarily. In fact, the recent decline in Federal Government of Nigeria (FGN) bond yields is one of the strongest signs that Nigeria’s economy is stabilizing, investor confidence is rising, and the Federal Government’s reform strategy is working. Let’s break it down.

FGN bond yields represent the return investors receive when they lend money to the government. So, when yields drop, it simply means demand for those bonds is high, more people are buying.

That’s not a crisis; it’s confidence. Investors, both local and international, are signaling that they believe Nigeria’s current direction is credible and sustainable. They see less risk and are willing to accept lower returns in exchange for safety.
In other words, a drop in yields means the government’s paper is now more trusted and attractive.

Under President Bola Ahmed Tinubu, Nigeria has undertaken major economic reforms, from unifying exchange rates to removing fuel subsidies and granting greater independence to the Central Bank of Nigeria (CBN).
While some of these moves initially caused short-term discomfort, they have restored confidence among investors, rating agencies, and financial institutions. These reforms are seen as necessary steps to reposition Nigeria on a path of fiscal responsibility and long-term growth.
The result? Rising investor appetite for Nigerian bonds, leading to lower yields.

From a fiscal standpoint, lower bond yields are good news for government finances.
It means the Federal Government can now borrow at lower interest rates, reducing its debt servicing burden. This allows more funds to be redirected to critical sectors like infrastructure, education, agriculture, and social investment programmes.
In short, cheaper borrowing equals more fiscal breathing space, a key goal of the Tinubu administration’s economic strategy.

For retail investors, lower bond yields may look like smaller short-term gains. But the broader opportunity is in the stability this trend brings.
When the bond market stabilizes, it creates room for other investment options to thrive from corporate bonds (which often offer higher yields) to equities and mutual funds.
As inflation expectations begin to ease, a more predictable investment environment emerges. This makes it easier for individuals and businesses to plan, save, and grow wealth sustainably.

Nigeria’s economy has endured turbulence, from inflationary pressures to exchange rate volatility. But today, the message from the bond market is clear: confidence is returning.

Falling yields are a signal of normalization, a reflection that the worst of the volatility may be behind us, and that policies are beginning to take effect. For the first time in years, Nigeria’s bond market is sending a positive message: the economy is regaining credibility.

This development is part of a broader narrative. The Tinubu administration has emphasized fiscal discipline, transparent debt management, and economic diversification.

Key steps such as:
I. Strengthening local debt markets
II. Refinancing high-interest obligations
III. Enhancing FX market transparency
IV. And promoting digital bond auctions
…have all combined to create a more resilient, investor-friendly environment.

So yes, FGN bond yields have dropped again but that’s not a sign of weakness. It’s a sign of strength.
It shows that investors now have greater trust in Nigeria’s fiscal direction, confidence in its policies, and optimism in its economic future.

Nigeria’s financial system is healing, and the drop in bond yields is proof that the reforms are beginning to bear fruit."

All join. Naira is worth more than it was 12 months ago (N1650:$1 to currently N1442:$1).
Our Naira is buying more Dollars and our Dollar is buying less Naira. Herein, also lies the beauty of diversification

RayRay06677:
Is naira appreciating or dollar is depreciating

Meanwhile, FGN bond prices have been going up (reducing yields) while the Naira has also been slowly appreciating

No auction has been held since 17 Sept 2025

PharoahIII:
Any auction today, if yes abeg make una post result abeg

Our renowned thread founder has aptly responded

feelamong:
People are busy making and counting their money

I will try

Odunharry:
Enjoy the loot chief

18 March 2036 FGN bond coupon payment received on time. The benefits of patience and compounding

Yes

kristien4:
For secondary tbills, is interest paid upfront too?

Secondary

21 Feb 2034 & 21 Feb 2031 FGN bond coupon payments received on time. The benefits of patience and compounding

What you would get every six month is 19.3% bond coupon annual rate divided by two multiplied by the face (nominal) value (N2,020,000) being N194,930 bi-annually. The lower yield to maturity rate of 16.5% is a reflection of the current bond purchase price which I suspect is cN115. The consideration is also higher than the nominal because there would be approximately four month interest on the bond to pay now which you get back at the next coupon date being 17 November 2025. The bond matures on 17 April 2029.

Hope the above helps

Meanwhile, as rates have been coming down, FGN bond prices have been rising (not unexpected). Most prices are up c9% since February this year

You are welcome. Yes FGN Bonds though they do both.

talk2tonie:
Ok, thank you.
You mean FGN Bond not FGN savings bond right?

Hello, you can use FSDH Merchant Bank (First Securities Discount House) as well as others like United Capital, Stanbic etc though I personally like FSDH

talk2tonie:
Hi,
Which bank or trading firm did you use to buy FGN bonds? These GTB branch people don’t seem to understand!

Hanging in there. We thank God. You?

Odunharry:
This man. Been a while. How's everything

18 July 2034 & 22 Jan 2026 FGN bond coupon payments received on time. The benefits of patience and compounding

Quite right 👍😉

emmaodet:
Exactly bro.
Exactly.
All these rubbishing the TB regularly should just stop.
You know quiet well before clicking on the thread that it is a TB group, so why come to rubbish it.
I am even okay with TB up to 15% provided interest rate/lending rate falls close to 20% too.
Below 15%, i will half my investment and put the other half in dollar mutual fund at 10% per annum to diversify but won't leave the naira investment totally.
You won't appreciate liquid investments like mutual funds, TB and bonds until you meet yourself in urgent emergencies then you will know solid cash like land may land you in problem to quickly and easily convert back to liquid cash to solve your problems.
The agents would smell your desperation and starts giving you shitty prices. Bring buyer today to inspect to come next week with cash which he will disappoint. Some will even say they only have 3m on ground for a 5m bargained land, out of desperation, you will say Yes only for them to say it is even 1.5m cash that is on ground to pay the rest in 6 months etc.
Also, let's be careful on this group, apart from land agents, so many scammers are on nairaland looking for who to dupe. It is an anonymous group and anybody can claim to be what they are not...rich, have large investment in TB, bought this land for this price to sell for this price etc all just to lure unsuspecting members with cash to contact them privately on how to help them.

18 March 2036 FGN bond coupon payment received on time

21 Feb 2034 FGN bond coupon payment received on time

2026 & 2034 FGN bond coupon payments received on time.

The FGN bond you reference below is c16.29% per year (c8.145% every six months) until maturity on 17 March 2027

yourstruly5:
Hi Everyone, please I need clarification on this. I came across a FGN bond with a coupon of 16.29 for two years. Assuming someone invests with N100,000, will the person get paid 16.29% of the principal in a year? OR it will be half of the 16.29% twice in a year? Thank you.

https://ngxgroup.com/exchange/trade/debt/listed-bonds/bonds-details/?isin=NGFG142027S5&directory=bonddirectory

But I have addressed that issue in my response to you. The price per unit you bought at (N97.85) is lower than N100 so you got a little more units. The example you refer to that I responded to in the past, the purchase price was above N100 per unit and the purchaser asked for a nominal amount of N12m. That is a different kind of instruction. For example, You could have asked for N18m nominal value or you could have asked for N18m worth of bond at the purchase price at the time. Finally, you mentioned your broker uses a multiple of N1000 to covey the number of units purchased or sold. Most brokers or banks I am aware of use a multiple of N100 to convey the number of units bought or sold. The multiple used is nothing for you to worry about because you will be sent an email to convey this information and if you have online access to your account with your broker, you will be able to see the nominal value of the units you purchased. Therefore, with your recent purchase, most banks or brokers will convey the number of units you bought as 181,930 but your broker uses a multiple of N1,000 so it is 18,193 units. What is important is the nominal value of the bonds you purchased which is N18,193,000. Hope this helps to provide the clarity you seek.

manwomanok:
Thank you bro for your simple explanation as always.

the issue was not even about the addition amount. you particularly in a reply to one of my post have explain how to calculate the accrued interest from day of last interest payment to day bond purchase for dirty price.. the issue is the quantity of 18,193. I thought quantity should be 180,000 following the example you gave to me in the past. below 12m naira bought 120k unit

Apologies no one replied to explain your FGN bond purchase to you. I was away over the festive period and just got back. There is nothing fishy other than perhaps your broker fee is included in the price of the bond sold to you. From the price and maturity year, I believe it is the one that matures on 15 May 2033 rather than the one that matures on 21 June 2033.

On that basis, the Nominal value at maturity of your bond purchase is N18,193,000 (you got a little bit more units because the bond price was below the nominal price of N100).

Interest will be paid at a coupon rate of 19.89% per annum (semi-annually i.e. half in May (cN1.8m) and the other half in November (cN1.8m) every year till maturity )

You reference an instruction to your broker to purchase N18m and you were debited N18.3m. The additional N300k was part of the accrued interest due of the bond from 15 November 2024 to early January this year (c6 weeks interest is about N417k meaning you had a balance from the N18m bond purchase instruction of cN117k. This also implies that the price of the bond included your broker fees. I think you might have given the instruction on Friday 3rd January because your initial enquiry post here was on 6 January.

Hope the above provides you with the clarity you seek or the clarity you sought.

manwomanok:
Bosses in the house doesn't look at my side this time. I am newbie on Bond investment, don't want to call my broker and ague blindly the reason I brough this for an insight

the gist was I asked my broker to buy me Bond worth of 20m , got a reply that they have only 18m worth, I gave the go ahead

with what I have been learning here It look something is not right, may be an error or something.  my reason of coming to my Bosses to shed more light.

I trust the below is helpful

Bakosokoto:
Could you please assist with the best pick (ROI) from below quotes

The above explanations are correct (clean & dirty bond prices) except in this case, it is not accrued interest for the whole of November 2024 that will be paid.
To be precise, you will pay accrued interest from 16 November 2024 to 24 December 2024 (23 December + 1 day settlement date) if you buy tomorrow because the maturity date for the 2033 FGN bond is 15 May 2033 from the prices you were quoted

manwomanok:
Good, That exactly layman explanation I wanted. Thank you sir

it mean if I buy tomorrow I will pay accrued interest of Nov. and Dec, plus broker's charges? also can you say something about the Bid price 94.98 and Bid yield 21.18.

Thank you once more

Yes. That's why it states discount rate & implied yield

Risingcash94:
Is this commercial paper interest paid upfront as well?