Last updated on
February 17, 2022

Bonds are financial instruments in which an investor lends money to a company or government for a set period of time in exchange for regular interest payments. When the bond matures, the bond issuer repays the investor's money. Bonds are often referred to as having a fixed income because your investment earns fixed payments over the life of the bond.

Bonds are issued by corporations to fund ongoing operations, new projects, or acquisitions. Governments sell bonds to raise funds and supplement revenue from taxes. When you buy a bond, you become a debtholder for the entity that issued the bond.

Nigerian Context

The Federal Government of Nigeria issues bonds to fund its budget deficits and key capital projects aimed for long-term economic impact.
According to Trading Economics, Nigeria’s 10-year bond yield was 12.61% as of Thursday, December 30, 2020, according to over-the-counter interbank yield quotes for this government bond maturity.

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