The Federal Government has announced plans to raise as much as ₦900 billion from the domestic debt market through its January 2026 bond auction, doubling the ₦450 billion it targeted in the corresponding auction last year.
Offer documents released by the Debt Management Office (DMO) revealed that the January 2026 auction will feature three reopened Federal Government of Nigeria bonds with a combined size of ₦900 billion, representing a 100 per cent year-on-year increase in the size of the January offer.
The move signals rising fiscal pressures and growing refinancing needs, as the government leans more heavily on the local bond market to fund its obligations.
In contrast, the January 2025 auction reflected a more restrained borrowing stance by the government, even amid elevated interest rates.
Naijaonpoint reports that at the time, the DMO offered three bonds across the five-year, seven-year and 10-year tenors, with a total target of ₦450 billion.
Specifically, the government sought to raise ₦100bn from a five-year bond due in April 2029 with a 19.30 per cent coupon, ₦150bn from a seven-year February 2031 bond carrying an 18.50 per cent coupon, and ₦200bn from a new 10-year January 2035 bond.
The comparatively smaller offer reflected relatively lower funding requirements at the time.
However, the January 2026 programme points to a sharper reliance on domestic borrowing.
According to the offer circular, the government plans to raise ₦300 billion from a reopening of the 18.50 per cent FGN February 2031 bond, ₦400 billion from a reopening of the 19.00 per cent FGN February 2034 bond, and ₦200 billion from a reopening of the 22.60 per cent FGN January 2035 bond.
This marks a clear shift both in scale and composition of government borrowing.
Beyond the increase in headline size, the structure of the auction suggests a growing preference for longer-dated instruments.
Ten-year bonds account for ₦600bn, or about two-thirds of the total January 2026 auction, compared with just ₦200bn in 10-year paper offered in January 2025.
Borrowing Costs Remain Elevated
Coupon rates on the reopened bonds remain high, reflecting tight monetary conditions, persistent inflation concerns and investors’ demand for higher yields.
Notably, the 22.60 per cent coupon on the January 2035 bond represents a significant step-up from rates on comparable tenors a year earlier, underscoring the rising cost of borrowing for the Federal Government.
The DMO stated that the bonds will be sold at ₦1,000 per unit, with a minimum subscription of ₦50.001 million.
Interest will be paid semi-annually, while principal repayment will be made in full at maturity under a bullet repayment structure.
For reopened bonds, successful bidders will pay prices determined by the yield that clears the auction volume, in addition to accrued interest.
Despite the plan to double its January bond auction, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the Federal Government intends to rely more on domestic resources and reduce its dependence on borrowing.
Speaking during an interview on Bloomberg Television at the World Economic Forum in Davos, Switzerland, on Tuesday, Edun said the administration was prioritising revenue generation.
“The issue now is to focus on revenue, focus on domestic resource mobilisation,” he said. “We’re hoping to rely less on borrowing.”
Edun added that while Nigeria could still access international bond markets if necessary, the government’s priority remains strengthening domestic revenue sources.
He noted ongoing efforts to improve tax collection and enhance fiscal sustainability amid mounting global economic pressures.
According to him, these measures are critical to reducing the country’s long-term reliance on debt financing while stabilising public finances.