The federal government, through the Debt Management Office (DMO), has raised an estimated N7.62 trillion via FGN Bonds between January and August 2026, as it continues to lean on the domestic debt market to bridge its budget deficit.
The borrowing comes amid a high cost of debt and rising debt-service pressure. Earlier data through August had put the total at N6.49 trillion, with the DMO offering N7.35 trillion to investors over the period but settling for the lower allotted figure amid elevated yields.
Pension fund administrators (PFAs) and fund managers have continued to play a central role in driving demand and trading volumes in the bond market. Since the start of the year, the DMO has repeatedly reopened existing FGN Bonds, aiming to attract investors with modest interest rates while supporting the government’s deficit financing needs.
At the most recent FGN auction in August 2026, the DMO reopened the JAN-2035, APR-2037 and JUN-2038 bonds, offering a combined N1.10 trillion. Total demand settled at N1.73 trillion, a bid-to-offer ratio of 1.6x, with the DMO eventually allotting N805.16 billion, representing a bid-to-cover ratio of 2.2x.
Stop rates on the three bonds — which had been on-the-run at the previous auction — contracted by 119, 116 and 61 basis points respectively, settling at 17.15%, 17.19% and 17.79%.
The government had earlier reported raising N3.6 trillion over the first five months of 2026, against total investor subscriptions of N7.63 trillion in that period — more than double the N3.7 trillion recorded over the same months in 2025. Nigeria’s federal government projected a budget deficit of roughly N13 trillion for 2025, financed largely through domestic borrowing, and has continued to rely heavily on FGN Bonds and treasury bills to meet its funding targets into 2026.
