The Federal Government has signalled a sharp increase in domestic borrowing, with plans to raise as much as ₦900bn from its January 2026 Federal Government of Nigeria (FGN) bond auction. This represents a 100 per cent increase compared with the ₦450bn raised in January 2025, reflecting rising fiscal pressures and growing refinancing needs.
Offer documents released by the Debt Management Office (DMO) show that the January 2026 auction will consist of three reopened FGN bonds with a combined size of ₦900bn, underscoring the government’s deeper reliance on the domestic debt market.
By contrast, the January 2025 auction adopted a more conservative borrowing posture. At the time, the government offered ₦100bn from a five-year April 2029 bond 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 ten-year January 2035 bond. The total ₦450bn offer reflected relatively lower funding requirements, even though interest rates were already elevated.
The January 2026 programme, however, points to a more aggressive borrowing strategy. According to the DMO’s offer circular, the government plans to raise ₦300bn from a reopening of the 18.50 per cent February 2031 bond, ₦400bn from a reopening of the 19.00 per cent February 2034 bond, and ₦200bn from a reopening of the 22.60 per cent January 2035 bond.
Notably, ten-year instruments will account for ₦600bn—around two-thirds of the total auction—compared with ₦200bn in ten-year paper offered in January 2025. Analysts say this shift suggests a deliberate effort to lengthen the maturity profile of government debt and reduce near-term refinancing risks.
However, the strategy comes at a higher cost. Coupon rates on the 2026 bonds remain elevated, reflecting tight monetary conditions and investors’ demand for compensation against inflation and interest-rate volatility. The 22.60 per cent coupon on the January 2035 bond marks a significant increase from comparable tenors a year earlier.
The DMO stated that the bonds will be issued at ₦1,000 per unit, with a minimum subscription of ₦50.001m. Interest will be paid semi-annually, with bullet repayment at maturity. For reopened bonds, successful bidders will pay prices determined by the auction-clearing yield, in addition to accrued interest.
Despite the expanded borrowing plan, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government aims to reduce reliance on debt over time. Speaking on Bloomberg Television at the World Economic Forum in Davos, Switzerland, he said the administration is prioritising revenue mobilisation and fiscal sustainability.
“The issue now is to focus on revenue, focus on domestic resource mobilisation,” Edun said. “We’re hoping to rely less on borrowing.”
He added that while Nigeria retains access to international bond markets if needed, the government’s preference is to strengthen internal revenue generation amid mounting global economic pressures.
