Nigeria’s debt office chief unhappy capital market not attracting small investors as just 13,200 key into FGN savings bonds in 18 months

The aim of introducing affordable federal government securities into the capital market has yielded results albeit unsatisfactory, according to Patience Oniha, the director general of Nigeria’s Debt Management Office.

Oniha disclosed this Tuesday, the second day of the African Securities Exchanges Association (ASEA) 2018 Conference and Annual General Meeting hosted by the Nigerian Stock Exchange (NSE) in Lagos, as a panelist on the theme “ Pathways to Inclusive Growth in Africa , Digital Finance, Financial Literacy, Inclusion and Democratisation of Wealth.”

She said that despite raising N10 billion and attracting about 13,200 new investors into the capital market through the Federal Government (FGN) savings bonds in the last 18 months, the experience has not met the expectations of the debt office.

“We expected to get a lot more, especially with all the money we spent on advertising and trying to create awareness,” Oniha said, while speaking on the debt office’s experience since the introduction of the FGN savings bond in March 2017.”

The main essence of the FGN savings bond is to promote financial inclusion by attracting small investors into the securities market. Another aim of the bond is to mobilise savings to the financial sector.

Oniha explained that the amount for subscribing to these bonds is kept as small as N10,000 to ensure affordability for various tenor instruments.

She however noted that the experience gathered with the savings bond has enabled the DMO realise that a lot of work still needs to be done.

She said the DMO sees that the retail investors could be attracted into the capital and securities market, but financial inclusion requires a lot of education.

She said the DMO will in addition to leveraging on technology, begin to drive financial literacy.

“We will like to do more in terms of working with the capital market operators in terms of increasing the amount of funds in the capital market,” Oniha said, urging stakeholders for the development of partnerships with the DMO that would further drive retail/domestic investor participation.

Highlighting the importance of technology in driving inclusion, another panelist, Herbert Wigwe the managing director Access Bank Plc, said that there is a confluence of huge technology changes as well as competition that is creating a new type of banking environment.

According to him, greater financial inclusiveness is ensured with technology today, as against many years ago when the cost of serving the bottom of the pyramid was significantly high.

“The traditional means to making money is vanishing, so we need to look for a different way to make money and to bring down cost,” Wigwe said.

He added that ” the 65 percent of Nigerians who are youths are important segment of the society. So, at Access Bank we are using technology to reach the youths and change how people transact business.

“Today usage of cards are no longer on the increase because of increase in technology through phones. You can use your phone to transact business even in the remote areas. So we are using technology to influence consumer behaviours because competition and technology is pushing people to new ways of doing things,” Wigwe said.