Nigeria Demands BVN, NIN For $500M Dollar Bond

The Federal Government of Nigeria has unveiled new identification requirements for investors in its latest financial offering, the Domestic FGN US Dollar Bond. According to a recent FAQ document from the Debt Management Office (DMO), all subscribers must provide a Bank Verification Number (BVN) and a National Identification Number (NIN).
The requirement applies to all Nigerian citizens, both within the country and those residing abroad. Nigerians in the diaspora who do not yet have these identifiers are encouraged to apply. The bond, part of a broader $2 billion program, seeks to raise $500 million in its initial tranche.
The FAQ specifies that subscriptions can only be made via electronic transfers; cash payments will not be accepted. Additionally, for those using funds from domiciliary accounts, these must have been in the account for at least 30 days prior to application.
The Domestic FGN US Dollar Bond offers a 9.75% annual coupon rate over five years, with a minimum investment threshold of $10,000—significantly lower than the typical $200,000 required for Eurobonds. Notably, income from these bonds is exempt from Companies Income Tax, Personal Income Tax, and Capital Gains Tax.
The bonds will be listed on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited, providing liquidity for investors who wish to trade before maturity. The auction will remain open until August 30, 2024, with the settlement date set for September 6, 2024. The government aims to raise a total of $1 billion through this bond initiative.
Finance Minister Wale Edun emphasized that the bond is designed to strengthen Nigeria’s external reserves and stabilize the foreign exchange market.