GOVERNMENT PROMISSORY NOTES ACT
Act · Governance
An Act establishes the legal framework for the Federal Government to issue, transfer, and redeem promissory notes as borrowing instruments. It targets the Federal Government, holders of these notes, and financial institutions involved in debt management. This enables short to medium-term funding for government needs.
GOVERNMENT PROMISSORY NOTES ACT
What Is This Policy?
An Act providing the legal basis for the issuance, transfer, and redemption of promissory notes by the Federal Government of Nigeria as instruments of government borrowing.
Who Does It Target?
Federal Government as issuer Holders of government promissory notes The Debt Management Office CBN managing government securities
What Does It Aim to Achieve?
Provide a legal framework for government to raise short to medium-term funding through promissory notes as an instrument of domestic borrowing.
Key Features
Issuance Authority: Government may issue promissory notes as evidence of borrowing with specified repayment terms. Transferability: Government promissory notes are negotiable and may be transferred. Security: Notes are backed by the full faith and credit of the Federal Government. Redemption: Notes are redeemed at face value on the specified maturity date.
Current Status
Rollout Stage: Active Coverage: Federal Government domestic borrowing instruments Beneficiaries: Government financing; note holders Funding: Federal Government revenue
How to Access
Purchase government promissory notes through CBN primary dealers Notes may be held to maturity or sold in secondary market Application method: Purchase through CBN or DMO approved channels.
Important Terms
Government promissory notes rank equally with other unsecured FGN obligations Notes held to maturity are redeemed at face value without penalty Transfer must be registered with CBN
Official Resources
Website: https://www.dmo.gov.ng Contact: Debt Management Office (DMO) / CBN
Legal Framework
Enacted under the legislative powers of the National Assembly as the Government Promissory Notes Act (Cap G9 LFN 2004). Operates alongside the Central Bank of Nigeria Act 2007, the Debt Management Office (Establishment, etc.) Act, the Finance (Control and Management) Act, and the Fiscal Responsibility Act 2007. Promissory notes are cleared through the Nigeria Inter-Bank Settlement System (NIBSS) framework.