The Federal Government is set to tap the domestic debt market for N700 billion in April 2026, extending a cautious reduction in monthly bond issuances as borrowing costs remain elevated and debt service pressures intensify.
The plan is contained in the April bond offer circular released by the Debt Management Office, which scheduled the auction for April 27 and settlement for April 29. The government will re-open existing bonds across three maturities to deepen liquidity in benchmark securities.
Breakdown of the offer shows N300 billion in the 17.945 per cent FGN August 2030 bond, N100 billion in the 17.95 per cent FGN June 2032 bond, and another N300 billion in the 22.60 per cent FGN January 2035 bond.
The instruments, issued in units of N1,000 with a minimum subscription of N50.001 million, are targeted largely at institutional investors such as pension funds, banks, and asset managers. They also qualify as liquid assets for banks and enjoy tax exemptions, features that typically support strong demand.
The April offer continues a downward adjustment from N900 billion in January, N800 billion in February, and N750 billion in March, indicating a measured scaling back rather than a departure from borrowing through the domestic market.
Market conditions, however, remain tight. Coupon rates on the shorter-tenor bonds hover around 17.9 per cent, while the 10-year instrument is priced significantly higher at 22.60 per cent, reflecting investor concerns over inflation, exchange rate volatility, and broader economic risks. Final yields will be determined at the auction through competitive bidding.
The high-yield environment aligns with the monetary tightening stance of the Central Bank of Nigeria, which has kept interest rates elevated in its effort to curb inflation. This policy direction has, however, translated into higher borrowing costs for the government.
Fiscal data underscore the strain. Nigeria’s debt service bill rose to about N16 trillion in 2025 from N13.02 trillion in 2024, highlighting the growing share of public revenue absorbed by debt obligations.
With total public debt estimated at N159.28 trillion as of December 2025 - and projected to exceed N170 trillion as new loans are drawn - concerns are mounting over the sustainability of the country’s debt profile.
Nigeria’s borrowing trajectory has accelerated over the past decade. After a relatively moderate phase following debt relief secured under former President Olusegun Obasanjo, debt levels rose sharply during the administration of former President Muhammadu Buhari, climbing from about N12 trillion in 2015 to roughly N87 trillion by 2023.
The current administration of President Bola Ahmed Tinubu has maintained a mix of domestic and external borrowing to fund budget deficits and infrastructure projects, including newly approved external loans and multilateral financing.
While officials argue that the borrowings are necessary to support economic growth, analysts continue to warn that rising debt service costs and weak revenue growth could pose significant risks to fiscal stability if left unchecked.
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