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OLADIPUPO
Asked: 2026-04-02T02:22:28+00:00 In:

Can Federal Government Bonds Lose Value Before Maturity in Nigeria Stock Market?

Good day house
Does FGN depreciate in value?
The reason being that I login to my afriinvest account and I discovered that my FGN BOND off N5000 is now N3800

fgn bonds nigeria

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3 Answers

  2. Haruna Yahaya
    Best Answer
    Starter Economist.

    Yeah, that can happen and it’s normal. Your FGN bond hasn’t really lost value unless you sell it now. What you’re seeing (₦5000 to ₦3800) is just the current market price, which goes up and down mostly because interest rates have increased. If you hold it till maturity, you’ll still get your full ₦5Read more

    Yeah, that can happen and it’s normal.

    Your FGN bond hasn’t really lost value unless you sell it now. What you’re seeing (₦5000 to ₦3800) is just the current market price, which goes up and down mostly because interest rates have increased.

    If you hold it till maturity, you’ll still get your full ₦5000 plus interest.

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  3. Ochoyoda
    Community Builder

    Yes — FGN Bonds can temporarily drop in value, but that does not mean you are losing money permanently (especially if you hold till maturity). Since you mentioned your ₦5,000 FGN bond on Afrinvest is now ₦3,800, here’s what is happening: Why Your FGN Bond Dropped from ₦5,000 to ₦3,800 FGN Bonds do nRead more

    Yes — FGN Bonds can temporarily drop in value, but that does not mean you are losing money permanently (especially if you hold till maturity).

    Since you mentioned your ₦5,000 FGN bond on Afrinvest is now ₦3,800, here’s what is happening:

    Why Your FGN Bond Dropped from ₦5,000 to ₦3,800

    FGN Bonds do not depreciate permanently, but their market price fluctuates because of:

    1. Interest Rate Changes (Most Common Reason)

    When new FGN bonds offer higher interest rates, older bonds with lower interest rates become less attractive.

    Example:

    You bought FGN Bond at 12%

    New bonds are now offering 17%

    Investors prefer the 17% bond

    So your 12% bond price drops in the market

    That’s likely what you’re seeing.

    2. Demand and Supply

    If many people are selling FGN bonds, price drops.

    If many people are buying, price increases.

    Important: You Only Lose If You Sell Now

    If you hold till maturity:

    You will still receive:

    Your ₦5,000 principal

    All interest payments

    So the ₦3,800 is just:

    Market price (if you sell today)

    Not your final value.

    Simple Example

    You bought:

    ₦5,000 FGN Bond

    Market shows:

    ₦3,800 (if sold now)

    But if you wait till maturity:

    You still receive ₦5,000 + interest

    This Happens to All Bonds (Even Government Bonds)

    Even though FGN bonds are:

    Very safe

    Backed by Federal Government

    They still fluctuate in price.

    My Advice (Especially Since You’re Still Growing Your Investments)

    Since you’re already investing in:

    Treasury Bills

    Bonds

    Equities

    You’re actually building a very good diversified portfolio 👍

    For small amount like ₦5,000, I recommend:

    Don’t sell

    Hold till maturity

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  4. Rose
    Starter Profile Credentials

    FGN Bonds do NOT behave like your bank savings. Yes. Their value can go up and down on the screen. The Issuer Your bond is issued by: 👉 Debt Management Office Which means: ✓ backed by Federal Government ✓ considered low risk (in terms of default) Let Me Explain With a Simple Story Mama Ngozi lends ₦Read more

    FGN Bonds do NOT behave like your bank savings.

    Yes.

    Their value can go up and down on the screen.

    The Issuer

    Your bond is issued by:

    👉 Debt Management Office

    Which means:

    ✓ backed by Federal Government
    ✓ considered low risk (in terms of default)

    Let Me Explain With a Simple Story

    Mama Ngozi lends ₦5,000 to the government.

    The government promises:

    • to pay interest every year
    • to return ₦5,000 at maturity

    That ₦5,000 is called:

    👉 Face Value (your real investment)

    Oya… Relax Let Me Explain

    Why Is It Showing ₦3,800?

    That ₦3,800 is:

    👉 market value

    Not your actual loss.

    What Is Market Value?

    It is:

    ✓ what someone is willing to pay NOW if you sell

    Key Truth

    👉 Bond price moves up and down daily

    Why Does Bond Price Drop?

    1. Interest Rate Changes (Major Reason)

    If new bonds offer higher interest:

    • your old bond becomes less attractive

    So:

    👉 price drops

    2. Market Demand

    If fewer people want your bond:

    👉 price falls

    3. Time to Maturity

    Longer duration bonds fluctuate more.

    VERY IMPORTANT (Don’t Miss This)

    Did You Actually Lose Money?

    👉 NO — unless you SELL at ₦3,800

    If You HOLD Till Maturity

    You will receive:

    ✓ full ₦5,000
    ✓ plus all your interest

    So What You Are Seeing Is:

    👉 Unrealized loss

    Let Me Be Honest With You

    Many people panic because:

    • they think bond = fixed value

    But in reality:

    ✓ bond price moves
    ✓ but maturity value is fixed

    When Should You Worry?

    Only if:

    • you urgently need to sell now

    When Should You Relax?

    If:

    • you can hold till maturity

    Simple Truth

    • Sell now → you may lose
    • Hold → you recover full value

    What You Should Do Now

    Option 1: Hold

    Best for:

    ✓ long-term investors

    Option 2: Sell

    Only if:

    • you need cash urgently

    Final Truth

    Your ₦5,000 did not disappear.

    It is just:

    👉 being priced by the market

    Let Me Leave You With This

    In investing, there are two values:

    • market value (changes daily)
    • actual value (what you receive at the end)

    Smart investors focus on:

    ✓ the final value

    Not temporary fluctuations.

    Rose Ejituru

    See less

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