The Federal Government of Nigeria repaid approximately N1.03 trillion in bond maturities on January 22, 2026, marking its highest single bond repayment in more than a decade.
Analysis by BusinessDay using data from the Debt Management Office (DMO) shows that the N1.03 trillion paid in 2026 represented the highest bond maturity payout. By comparison, the Federal Government repaid about N558 billion in 2024 and N430 billion in 2025, highlighting a rising public debt burden.
Analysts at FMDA Research, in their weekly market report, said 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.
They noted that the size and concentration of the inflows could influence short-term market conditions.
“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.
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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).
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.
Olufunmilola Adebowale, head of research at Parthian Partners, said government borrowing typically expands alongside economic development.
“As long as government revenue continues to grow, borrowing and debt servicing will also rise. What matters most is how the borrowed funds are utilised,” she said.
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.
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.
Wale Edun, Nigeria’s Minister of Finance, said the country will rather focus on improving its revenue streams than relying on borrowing to finance its economy, even though it can access the international bond markets.
“The issue now is to focus on revenue, focus on domestic resource mobilisation,” Edun, who doubles as the coordinating minister of the economy, said in an interview on Tuesday on the sidelines of the World Economic Forum in Davos. “We’re hoping to rely less on borrowing.”
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Tepid growth raises sustainability concerns
Analysts warn that Nigeria’s slow economic growth raises concerns about the sustainability of rising debt levels.
“Debt can only be sustainably managed if borrowed funds generate returns sufficient to service that debt,” said Tunde Abioye, research analyst at FBNQuest.
“This means investing in productive capital, not recurrent expenditure. Spending on salaries, luxury vehicles, and political lifestyles does not generate returns. Investments in physical and human infrastructure do,” he added.
BusinessDay analysis shows that bond repayments have risen sharply by 1,614 percent in the past decade, reflecting widening fiscal deficits and increased reliance on the domestic market.
Nigerian authorities rolled out some major reforms about three years ago, which have helped boost the country’s fiscal position. The policies saw the government collect N28 trillion in taxes in 2025.
That’s 30 percent more than targeted, according to Zaccheus Adedeji, head of the Nigeria Revenue Service. Oil revenue rose 21 percent to N6.8 trillion from the year before, while non-oil revenue grew 33 percent to N21.5 trillion.
In 2026, Africa’s biggest oil exporter is taking bold steps in widening its revenue base, including implementing the controversial tax reforms that seek to curb leakages, ensure compliance and increase tax as a share of the economy to 18 percent in the next two years.
The potential improvement in revenues is expected to help offset the widening deficit in its budget this year. Africa’s most populous economy earmarked more than a quarter of its about N58 trillion budget to go toward interest payments, while muted oil income is forecast to keep revenues near N34 trillion naira.
That translates to a budget deficit of roughly N24 trillion, or about 4.3 percent of gross domestic product, wider than last year’s estimated shortfall.
DMO to issue an additional 900 billion
In its latest circular on Monday, the DMO announced plans to raise N900 billion through the re-opening of three FGN bonds at its January 2026 auction. They include N300 billion in the 18.50 percent FGN February 2031 (7-year), N400 billion in the 19.00 percent FGN February 2034 (10-year), and N200 billion in the 22.60 percent FGN January 2035 (10-year) bonds. The auction is scheduled for January 26, 2026, with settlement on January 28, 2026.