FG targets N700bn from April bond auction amid high borrowing costs

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 Key points

• Federal Government plans to raise N700bn via April bond auction.
• Debt Management Office to issue bonds across three maturities.
• Offer size continues downward trend from N900bn in January.

Main story

The Federal Government is set to raise N700 billion from the domestic bond market in April 2026, continuing a gradual reduction in monthly borrowing as it navigates elevated interest rates.

According to the April Bond Offer Circular issued by the Debt Management Office (DMO), the auction is scheduled for April 27, with settlement expected on April 29.

The issuance will be conducted through the re-opening of existing Federal Government of Nigeria (FGN) bonds across three maturities to enhance liquidity in benchmark securities.

The offer includes N300 billion of the 17.945 per cent FGN August 2030 bond, N100 billion of the 17.95 per cent FGN June 2032 bond, and N300 billion of the 22.60 per cent FGN January 2035 bond.

The issues

The move comes amid sustained high borrowing costs driven by inflationary pressures and tight monetary policy by the Central Bank of Nigeria.

While the government continues to access the domestic debt market, rising yields—particularly on long-term instruments—reflect investor demand for higher returns in a volatile economic environment.

What’s being said

The DMO noted that the bonds will be issued in units of N1,000, with a minimum subscription of N50.001 million, primarily targeting institutional investors such as pension funds, banks, and asset managers.

It added that the instruments qualify as liquid assets for banks and enjoy tax exemptions, factors expected to sustain investor interest.

Recent issuance patterns show a steady decline in offer size—from N900 billion in January to N700 billion in April—indicating a calibrated adjustment rather than a shift in borrowing strategy.

What’s next

Final yields will be determined at the auction based on investor bids, while market watchers will assess demand levels and pricing trends.

Attention will also remain on the government’s debt profile, as rising interest rates continue to increase debt servicing costs.

Bottom line

The Federal Government’s planned N700bn bond issuance reflects a cautious borrowing strategy amid high interest rates, as authorities balance funding needs with rising debt servicing pressures.