The Federal Government of Nigeria will repay approximately N1.03 trillion in bond maturities on January 22, 2026, as part of its obligations to domestic bond investors.
According to analysts at FMDA Research in their weekly market report, nearly 40 percent of the FGN bond maturities falling due this week are concentrated in the 12.50 percent FGN January 2026 bond, which matures on January 22.
The analysts noted that the size and concentration of the inflows could shape near-term market dynamics. “Market participants should closely monitor the reinvestment pattern, as the size and concentration of inflows could elevate FX demand and put short-term pressure on the naira,” FMDA Research noted in its weekly report.
Debt profile provides context for large maturities
The repayment comes against the backdrop of Nigeria’s expanding public debt stock. According to the Medium-Term Expenditure Framework (MTEF) 2026–2028, total public debt stood at $94.2 billion as of December 31, 2024, split almost evenly between external debt (48.5 percent) and domestic debt (51.4 percent).
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By the end of the first quarter of 2025, total public debt had risen to $97.2 billion, driven largely by an increase in domestic borrowings.
In naira terms, total public debt rose sharply to N149.3 trillion by March 31, 2025, reflecting currency depreciation effects and additional borrowing. Domestic debt accounted for N51.2 trillion, while external obligations stood at N45.9 trillion, including the debts of state governments and the Federal Capital Territory.
The Federal Government’s share continues to dominate Nigeria’s debt profile, reinforcing the importance of domestic bond issuances as a core financing tool.
Domestic debt dominance and refinancing risks
While the MTEF highlights the government’s preference for concessionary external financing, domestic instruments remain central to funding fiscal operations. These include FGN Bonds and Treasury Bills, alongside alternative instruments such as Savings Bonds, Sukuk, Green Bonds, and Promissory Notes, issued under the supervision of the Debt Management Office.
This growing reliance on domestic debt means large bond maturities, such as the N1.03 trillion January repayment, carry refinancing and liquidity implications. If reinvestment appetite weakens, excess liquidity could spill into the FX market, intensifying pressure on the naira in the short term.
Debt servicing remains the binding constraint
Despite efforts to improve debt sustainability, fiscal space remains tight. The MTEF shows that debt service costs reached N13.12 trillion in 2024, accounting for 46 percent of total FGN expenditure and 77.5 percent of government revenues.
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This underscores why large domestic maturities matter beyond cash repayment: without strong domestic resource mobilisation, rollover pressures will persist, limiting the government’s ability to scale spending on infrastructure, healthcare, and education.
Market takeaway
The January bond repayment is manageable, but its scale and concentration highlight Nigeria’s growing dependence on domestic debt markets. How investors reinvest the N1.03 trillion will be critical for FX stability, liquidity conditions, and short-term yield direction.