By Jimmy Fatunb
The Federal Government is set to raise N700bn from the domestic bond market in April 2026, continuing a gradual scale-down in offer size amid persistently high borrowing costs.
According to the April 2026 Bond Offer Circular released by the Debt Management Office, the auction will take place on April 27, with settlement slated for April 29.
The issuance will involve the re-opening of existing bonds across three maturities, a strategy designed to deepen liquidity in benchmark securities and sustain market activity.
Breakdown of the bond shows N300bn for the 17.945 per cent FGN August 2030 bond, N100bn for the 17.95 per cent FGN June 2032 bond, and another N300bn for the 22.60 per cent FGN January 2035 bond.
The instruments will be sold in units of N1,000, with a minimum subscription of N50.001m, largely targeting institutional investors such as pension funds, banks, and asset managers.
The DMO noted that the bonds qualify as liquid assets for banks and enjoy tax exemptions under existing regulations, features that have continued to bolster investor demand.
An analysis of recent issuances indicates a steady reduction in the government’s monthly borrowing plan. From N900bn in January, the offer dropped to N800bn in February, N750bn in March, and now N700bn in April, reflecting a cautious adjustment rather than a departure from its broader funding strategy.
In March, the government raised N750bn through a mix of N250bn in five-year bonds, N200bn in seven-year bonds, and N300bn in 10-year instruments.
The April offer trims the total size by N50bn and also reshapes the maturity mix, with a notable reduction in the seven-year segment.
The pricing structure underscores the prevailing high-yield environment. While the five-year and seven-year bonds carry coupon rates of about 17.945 per cent and 17.95 per cent respectively, the 10-year bond is priced significantly higher at 22.60 per cent.
This marks a notable rise compared to similar long-term instruments offered in recent months, reflecting investor expectations for higher returns amid inflationary pressures, exchange rate volatility, and global economic uncertainty.
However, final yields will be determined at the auction, where successful bidders will pay based on their yield-to-maturity bids along with accrued interest.
The elevated yield environment mirrors the tight monetary stance of the Central Bank of Nigeria, which has maintained high interest rates to rein in inflation. This policy direction continues to raise domestic borrowing costs and intensify pressure on the government’s debt servicing burden.
Earlier data showed that Nigeria’s total debt servicing rose to about N16tn in 2025, based on figures from the Debt Management Office. This represents an increase of N2.98tn, or 22.9 per cent, from N13.02tn recorded in 2024, underscoring mounting fiscal pressure as debt obligations consume a larger share of public resources.
