Saturday, 16 April 2016

There is an Investment Opportunity available in Nigeria now

 The CBN, after the monetary policy meeting held in March is about to withdraw about 1 trillion Naira from circulating and also to borrow money for the government from the public. In order to do this, the Central Bank of Nigeria is about to sell federal government bonds to the members of the public. The federal government bond is simply a paper or a certificate
given by the Central Bank on behalf of the Federal government stating that the Federal Government owes a person the amount written on the paper or certificate with interest which is to be paid back by the government at a particular date of your choosing. So if we buy the CBN bond, it means that the Federal Government is in a debt to everyone that buys. This is the best form of financial investment that a person can make because it is backed up by the government, irrespective of a change in administration or probably shortage of fund, the government can always resort to borrowing just to pay back the debt when due. So, you should have no worry on this one, you're always going to get your money back with interest.
  In investment terms, it is risk free. These bonds when bought can be sold to others at a higher price and a person can hold or keep this bond for as long as possible. When the federal government wants to buy it back, they buy back the bond from you at a price higher than the price you bought it. The Federal Government always make buying of bonds worth it because they need people to buy it.
    After the CBN monetary policy meeting, the CBN decided to take contractionary measures by the sale of bonds which will reduce the amount of money in circulation. For instance, if Mr Alex buys a bond with 10,000 Naira, the CBN automatically has an additional 10,000 Naira in its safe and there's a reduction of 10,000 Naira in circulation. So you can imagine how much more will be reduced if much more is sold. With the little knowledge you have of Economics, you must have heard of inflation; excess money in circulation. So before you go about insulting the government about the current state of the economy, encourage them by purchasing these bonds, its all in a quest to save the economy.
NB: The minimum amount buyable is 10,000 Naira. Bonds can only be sold back to the government after a period of one year and above. So if you buy this year, it can only be sold back after a year or 2 years or 3 years and so on.
Someone might get to wonder why I made mention of CBN and Federal Government interchangeably, the reason is because in everything concerning money, the Federal Government carries them out using the CBN, The CBN is the bank of the Federal Government.
Okay... So, who is considering buying the government bond already? Wow.... I see so many hands up. lol....

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