The Federal Government has announced plans to raise ₦900bn from its January 2026 bond auction, doubling the ₦450bn it targeted in January 2025.
This reflects mounting fiscal pressures and refinancing needs, while signalling a sharper reliance on the domestic debt market.
Offer documents released by the Debt Management Office (DMO) show that the January 2026 auction will feature three reopened Federal Government of Nigeria (FGN) bonds with a combined size of ₦900bn:
- ₦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
The bonds will be sold at ₦1,000 per unit, with a minimum subscription of ₦50.001m, interest payable semi-annually, and bullet repayment at maturity. Successful bidders will pay prices based on the yield that clears the auction volume, plus accrued interest.
Comparison With January 2025
In January 2025, the government adopted a more restrained borrowing posture, offering three bonds across the five-year, seven-year, and ten-year segments:
- ₦100bn from a five-year April 2029 bond (19.30% coupon)
- ₦150bn from a seven-year February 2031 bond (18.50% coupon)
- ₦200bn from a new ten-year January 2035 bond
The total ₦450bn offer reflected comparatively lower funding requirements at the time, even as interest rates remained elevated.
The January 2026 programme signals a strategic shift. Ten-year instruments now account for ₦600bn, or two-thirds of the total auction, compared with just ₦200bn in ten-year paper offered in January 2025.
This stronger preference for longer-dated debt is aimed at extending the maturity profile of government obligations and reducing near-term refinancing risks.
Coupon rates remain high, reflecting tight monetary conditions and investor demand for inflation protection. The 22.60% coupon on the January 2035 bond marks a notable increase from comparable tenors a year earlier, highlighting the higher cost at which the government is now borrowing.
Government’s Position
Despite the doubling of the bond auction size, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government intends to rely more on domestic resources and reduce dependence on borrowing.
Speaking on Bloomberg Television at the World Economic Forum in Davos, Edun stated: “The issue now is to focus on revenue, focus on domestic resource mobilisation. We’re hoping to rely less on borrowing.”
He added that while Nigeria could access international bond markets if necessary, the priority remains mobilising domestic resources. Efforts are underway to raise tax revenue and strengthen fiscal sustainability amid global economic pressures.
Analysts suggest the larger bond auction reflects the government’s urgent need to finance budget deficits and refinance existing obligations. The reliance on longer-dated instruments may help spread repayment risks, but the elevated coupon rates highlight the challenge of borrowing in a high-interest environment.
This is a balancing act between raising funds to meet fiscal needs and pursuing reforms to boost revenue generation and reducing reliance on debt.
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