An FGN (Federal Government of Nigeria) Bond is a debt security issued by the Nigerian government to raise funds from the public. These bonds are considered low-risk investments as they are backed by the government’s credit. Investors purchase FGN Bonds with the expectation of receiving periodic interest payments (coupons) and the return of the principal amount (face value) at maturity. The bonds are usually long-term, with maturities ranging from a few years to several decades.
Consider an investor who purchases a 10-year FGN Bond with a face value of ₦1,000,000 at an annual interest rate of 12%. The government agrees to pay the investor 12% of ₦1,000,000 each year, which amounts to ₦120,000 annually. At the end of the 10-year period, the investor will receive the initial ₦1,000,000 principal back. This setup provides a steady income stream and the safety of the principal investment.
Land banking is the practice of acquiring large parcels of undeveloped land with the intention of holding onto them until they appreciate in value. This strategy is commonly used in real estate to take advantage of future urban expansion or infrastructure development. Investors in land banking typically do not develop the land immediately but wait for the right moment when the value has significantly increased, allowing for substantial profits from its sale or development.
