FG doubles January bond borrowing to N900bn

The Federal Government has significantly increased its domestic borrowing plan, targeting N900bn from its January 2026 bond auction—double the N450bn raised in January 2025—as fiscal pressures and refinancing needs intensify.

Offer documents released by the Debt Management Office (DMO) show that the January 2026 auction will involve the reopening of three Federal Government of Nigeria (FGN) bonds with a combined value of N900bn, representing a 100 per cent year-on-year increase in the size of the January offering.

In January 2025, the government adopted a more cautious approach, offering N450bn across three bonds in the five-year, seven-year and 10-year tenors. At the time, it sought to raise N100bn from a five-year April 2029 bond with a 19.30 per cent coupon, N150bn from a seven-year February 2031 bond at 18.50 per cent, and N200bn from a new 10-year January 2035 bond, despite elevated interest rates.

The January 2026 programme reflects a stronger reliance on the domestic debt market. According to the DMO, the government plans to raise N300bn from a reopened 18.50 per cent FGN February 2031 bond, N400bn from a reopened 19.00 per cent FGN February 2034 bond, and N200bn from a reopened 22.60 per cent FGN January 2035 bond.

The structure of the offer also points to a shift in borrowing strategy, with longer-dated instruments dominating the auction. Ten-year bonds account for N600bn, about two-thirds of the total offer, compared with N200bn in 10-year paper in January 2025. This suggests an effort to extend the maturity profile of government debt and reduce short-term refinancing risks.

However, the move comes at a higher cost. Coupon rates remain elevated, reflecting tight monetary conditions and investors’ demand for inflation and interest-rate risk premiums. The 22.60 per cent coupon on the January 2035 bond marks a sharp increase compared with similar tenors a year earlier, underscoring the rising cost of borrowing.

The DMO said the bonds will be offered at N1,000 per unit, with a minimum subscription of N50.001m. Interest will be paid semi-annually, while principal repayment will be made in full at maturity. Successful bidders for reopened bonds will pay prices determined by the auction-clearing yield, plus accrued interest.

Despite the plan to double bond issuance in January 2026, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government aims to reduce its dependence on borrowing by focusing on domestic resource mobilisation.

Speaking on Bloomberg Television at the World Economic Forum in Davos, Switzerland, Edun said the government’s priority is to boost revenue generation. “The focus is on revenue and domestic resource mobilisation. We hope to rely less on borrowing,” he said.

He added that while Nigeria could still access international capital markets if necessary, the administration is prioritising improved tax revenue and fiscal sustainability amid growing global economic uncertainties.