The Federal Government has announced plans to significantly increase domestic borrowing, targeting N900bn from its January 2026 bond auction—double the N450bn raised in January 2025—as fiscal pressures and refinancing needs intensify.
Offer documents from the Debt Management Office (DMO) show that the January 2026 auction will involve three reopened Federal Government of Nigeria (FGN) bonds with a combined size of N900bn, representing a 100 per cent year-on-year increase in the January offering.
In contrast, the January 2025 auction reflected a more cautious borrowing approach. The government offered three bonds across the five-year, seven-year and 10-year tenors, seeking 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. The total N450bn offer came despite elevated interest rates, pointing to relatively lower funding needs at the time.
The January 2026 programme signals a heavier reliance on the domestic debt market. According to the offer circular, the government plans 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.
The structure of the offer also reflects a shift in borrowing strategy. Ten-year instruments account for N600bn, or about two-thirds of the total auction, compared with N200bn in long-dated paper offered in January 2025. This points to a stronger preference for longer-term borrowing, likely aimed at extending the maturity profile of public debt and easing near-term refinancing risks.
Coupon rates on the 2026 bonds remain elevated, underscoring tight monetary conditions and investors’ demand for higher yields amid inflation and interest-rate uncertainty. The 22.60 per cent coupon on the January 2035 bond marks a significant increase from comparable tenors a year earlier, highlighting the rising cost of government 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, with principal repaid in full at maturity. For reopened bonds, successful bidders will pay prices determined by the yield that clears the auction, in addition to accrued interest.
Despite the expanded borrowing plan, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government aims to reduce its dependence on debt by focusing more on domestic resource mobilisation. Speaking on Bloomberg Television at the World Economic Forum in Davos, Switzerland, he said the priority is to strengthen revenue generation, even though Nigeria could still access international bond markets if necessary.
“We’re hoping to rely less on borrowing,” Edun said, noting ongoing efforts to boost tax revenue and improve fiscal sustainability amid growing global economic pressures.
