The Federal Government has moved to significantly scale up domestic borrowing, planning to raise as much as N900bn from its January 2026 bond auction. The amount doubles the N450bn it targeted in January 2025, as fiscal pressures and refinancing needs continue to mount.
Offer documents released by the Debt Management Office show that the January 2026 auction will feature three reopened Federal Government of Nigeria bonds with a combined size of N900bn, marking a 100 per cent year-on-year increase in the size of the January offering.
In January 2025, the government seemed to adopt a more restrained borrowing posture, offering three bonds across the five-year, seven-year, and 10-year segments.
It sought to raise N100bn from a five-year bond originally issued in April 2029 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 ten-year January 2035 bond. The total N450bn offer reflected comparatively lower funding requirements at the time, even as interest rates remained elevated.
The January 2026 programme, however, points to a sharper 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 FGN February 2031 bond, N400bn from a reopening of the 19.00 per cent FGN February 2034 bond, and N200bn from a reopening of the 22.60 per cent FGN January 2035 bond.
Beyond the increase in headline size, the composition of the offer also signals a shift in borrowing strategy. Ten-year instruments account for N600bn, or about two-thirds of the total auction, compared with N200bn in ten-year paper offered in January 2025.
This suggests a stronger preference for longer-dated debt, likely to extend the maturity profile of government obligations and reduce near-term refinancing risks. Coupon rates on the 2026 bonds remain high, reflecting tight monetary conditions and investors’ demand for protection against inflation and interest-rate uncertainty.
The 22.60 per cent coupon on the January 2035 bond represents a notable step-up from the rates on comparable tenors a year earlier, indicating the higher cost at which the government is now borrowing.
The Debt Management Office stated that the bonds will be sold at N1,000 per unit, with a minimum subscription of N50.001m, interest payable semi-annually, and bullet repayment at maturity. For reopened bonds, successful bidders will pay prices based on the yield that clears the auction volume, in addition to accrued interest.
Despite the plan to double the FGN bond auction for January 2026, the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, said that the Federal Government plans to rely more on domestic resources and reduce its dependence on borrowing.
He said this during an interview on Bloomberg Television at the World Economic Forum in Davos, Switzerland, on Tuesday. “The issue now is to focus on revenue, focus on domestic resource mobilisation,” he said. “We’re hoping to rely less on borrowing.”
He also said that while the country could access international bond markets, if necessary, the government’s priority is to mobilise its own resources. Edun noted the government’s efforts to raise tax revenue and strengthen fiscal sustainability amid mounting global economic pressures.
