The Federal Government has signalled a deeper turn to the domestic debt market, planning to raise as much as N900bn from its January 2026 bond auction as fiscal pressures and refinancing needs intensify.
Offer documents issued by the Debt Management Office show that the planned auction will feature three reopened Federal Government of Nigeria bonds with a combined size of N900bn, representing a 100 per cent increase over the N450bn offered in January 2025.
In January last year, the Federal Government adopted a more measured borrowing stance, offering N450bn across five-year, seven-year and 10-year tenors. At the time, it sought N100bn from a five-year April 2029 bond with a 19.30 per cent coupon, N150bn from a seven-year February 2031 bond carrying an 18.50 per cent coupon, and N200bn from a new 10-year January 2035 bond.
The January 2026 programme, however, reflects a stronger reliance on domestic borrowing. Under the plan, the government aims to raise N300bn from a reopening of the 18.50 per cent February 2031 bond, N400bn from the 19.00 per cent February 2034 bond and N200bn from the 22.60 per cent January 2035 bond.
Beyond the larger headline figure, the composition of the offer points to a shift in borrowing strategy. Ten-year instruments account for about two-thirds of the total auction, compared with N200bn in 10-year bonds offered in January 2025, suggesting a preference for longer-dated debt to reduce near-term refinancing risks.
A source at the Debt Management Office said the structure of the auction reflects an effort to manage refinancing risks while meeting funding needs.
“The increased allocation to longer-dated instruments is aimed at extending the maturity profile of government debt and easing short-term rollover pressures,” he said.
Coupon rates on the 2026 bonds remain elevated, reflecting tight monetary conditions and investors’ demand for protection against inflation and interest-rate uncertainty.
Commenting on the pricing environment, the source noted that “current yields reflect prevailing market conditions, including inflation expectations and tight liquidity,” he said.
The Debt Management Office said the bonds will be sold at N1,000 per unit with a minimum subscription of N50.001m, semi-annual interest payments and bullet repayment at maturity. For reopened bonds, successful bidders will pay prices determined by the yield that clears the auction volume, in addition to accrued interest.
Despite the planned increase in domestic borrowing, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government intends to prioritise revenue generation and domestic resource mobilisation over borrowing.
“The issue now is to focus on revenue and focus on domestic resource mobilisation,we are hoping to rely less on borrowing and strengthen fiscal sustainability,” he said.
Edun added that while Nigeria could still access international bond markets if necessary, the government’s preference is to mobilise its own resources amid mounting global economic pressures.
“If we need to, we can access international markets, but our priority is to raise more revenue at home and reduce dependence on debt,” he said.