This is particularly important as the bonds market is becoming redefined from a primarily sovereign fiscal deficit process to a sound investment option.
The index was introduced on December 29, 2006, and consists of local currency denominated fixed-rate Federal Government of Nigeria Bonds.
Hitherto, a huge percentage of the Nigeria's domestic debt instruments were structured into Treasury Bills with maturities of 91days and below; creating inconsistencies and irregularities in the federal government's borrowing costs.
The DMO, in a bid to restructure the Federal Government of Nigeria’s deficit funding from shorter to longer tenored borrowing instruments, improve and lengthen the yield curve in the domestic money markets, and to encourage long-term savings, introduced the sale of Federal Government of Nigeria ("FGN Bonds") Bonds in October 2003.
In August 2006, a primary dealership/market maker network was established whereby the Primary Dealers/Market Makers ("PDMMs") are the only institutions authorised to deal directly with the DMO in Bond auctions and as such are expected to play an active role in the issuance, sale and marketing of all FGN Bonds to be issued subsequent to their appointment as PDMMs.