FG Plans N700bn Bond Sale as Borrowing Costs Stay High in Nigeria

As it continues to manage high borrowing rates, the Federal Government intends to raise N700 billion from the domestic bond market in April 2026, extending a steady decline in offer size.

According to information from the Debt Management Office’s April 2026 Federal Government of Nigeria Bond Offer Circular, the auction is set for April 27 and will be settled on April 29.

In order to increase the liquidity of benchmark securities, the issuance will be carried out by reopening existing instruments across three maturities. 

According to the circular, the offer consists of N100 billion for the 17.95 percent FGN June 2032 bond, N300 billion for the 22.60 percent FGN January 2035 bond, and N300 billion for the 17.945 percent FGN August 2030 bond.

The bonds, which are intended for institutional investors including pension funds, banks, and asset managers, would be issued in N1,000 units with a minimum subscription of N50.001 million.

The DMO also pointed out that the instruments are tax-exempt under current legislation and are eligible as liquid assets for banks, both of which sustain investor interest.

The April offer reflects an additional cut to the government’s monthly borrowing target, according to a study of prior issuances.

From N900 billion in January to N800 billion in February, N750 billion in March, and now N700 billion in April, the offer has steadily decreased, indicating a calibrated adjustment rather than a change in overall strategy.

A total of N750 billion was offered by the government in March, consisting of N250 billion in a five-year bond, N200 billion in a seven-year bond, and N300 billion in a ten-year bond.

In addition to changing the allocation across maturities and reducing the overall amount by N50 billion, the most recent revision drastically cuts the seven-year component.

The April issuance’s coupon structure emphasizes the current high-yield climate even more. The 10-year bond is priced much higher at 22.60 percent, while the five-year and seven-year contracts bear rates of roughly 17.945 percent and 17.95 percent, respectively.

In comparison to comparable long-term instruments provided in prior months, this marks a significant rise, showing investor demand for higher returns to offset risks related to inflation, exchange rate pressure, and global uncertainty.

However, final yields will be decided at the auction, where winning bidders would pay according to their yield-to-maturity bids plus interest.

The Central Bank of Nigeria’s strict monetary policy, which has kept interest rates high to reduce inflation, is consistent with the ongoing high-rate environment. This thus increases the cost of borrowing domestically and puts further strain on the government’s debt payment commitments.

According to data analysis from the Debt Management Office, Nigeria’s total debt service increased to almost N16 trillion in 2025, as previously reported by The PidomNigeria.

The amount increased by N2.98 trillion, or 22.9%, from over N13.02 trillion in 2024, indicating mounting fiscal strain as debt service continues to consume a greater portion of public funds.