The Federal Government plans to raise ₦900 billion from the domestic debt market through its January 2026 bond auction, doubling the ₦450 billion targeted in the same period last year.....KINDLY READ THE FULL STORY HERE▶

Offer documents from the Debt Management Office (DMO) show that the January 2026 auction will feature three reopened Federal Government of Nigeria (FGN) bonds totaling ₦900 billion, marking a 100% year-on-year increase in the size of the January offer.

The move highlights rising fiscal pressures and the government’s growing reliance on the local bond market to meet funding needs. In contrast, the January 2025 auction reflected a more restrained borrowing approach despite high interest rates at the time.

In the 2025 auction, the DMO offered three bonds across five-year, seven-year, and ten-year tenors, targeting a total of ₦450 billion:

• ₦100bn from a five-year bond due April 2029 (19.30% coupon)

• ₦150bn from a seven-year bond due February 2031 (18.50% coupon)

• ₦200bn from a ten-year bond due January 2035

The smaller offer reflected lower funding requirements then.

For January 2026, the government aims to raise:

• ₦300bn from a reopening of the 18.50% FGN February 2031 bond

• ₦400bn from a reopening of the 19.00% FGN February 2034 bond

• ₦200bn from a reopening of the 22.60% FGN January 2035 bond

This represents a larger scale and a shift toward longer-dated instruments, with ten-year bonds accounting for ₦600 billion, or about two-thirds of the total, compared with just ₦200 billion in 10-year paper in January 2025.

Borrowing Costs Remain High
Coupon rates remain elevated, reflecting tight monetary conditions, persistent inflation, and investors’ demand for higher yields. Notably, the 22.60% coupon on the January 2035 bond is a significant increase over comparable tenors a year ago, highlighting the rising cost of borrowing.

The DMO stated that bonds will be sold at ₦1,000 per unit, with a minimum subscription of ₦50.001 million. Interest will be paid semi-annually, and principal will be repaid in full at maturity under a bullet repayment structure. For reopened bonds, prices will be determined by the yield that clears the auction volume, plus accrued interest.

Despite the larger January auction, Finance Minister and Coordinating Minister of the Economy Wale Edun said the government plans to rely more on domestic resources and reduce borrowing dependence.

Speaking to Bloomberg Television at the World Economic Forum in Davos, Edun said the administration’s priority is revenue generation.

“The focus now is on revenue and domestic resource mobilisation. We’re hoping to rely less on borrowing,” he said.

Edun added that Nigeria could still access international bond markets if necessary, but the government’s main focus remains strengthening domestic revenue sources. He highlighted ongoing efforts to improve tax collection and enhance fiscal sustainability, which are critical to reducing long-term debt dependence and stabilising public finances.