Nigeria Plans N600 Billion Domestic Bond Sale to Manage Debt and Fund Spending

The Nigerian government is returning to the local debt market to raise N600 billion through a bond auction scheduled for May 18, 2026. This move is part of ongoing efforts to manage the country’s financing needs, tackle rising debt servicing costs, and adapt to changing liquidity conditions.

According to the Debt Management Office (DMO), the offer includes two previously issued bonds, each reopened at N300 billion:

· A 10-year bond at 22.60% interest, maturing January 2035 · A 20-year bond at 16.2499% interest, maturing April 2037

The auction will settle on May 20, 2026. Each bond unit costs N1,000, with a minimum subscription of N50 million, and additional investments in multiples of N1,000.

Since these are reopenings, the interest rates are already fixed. Successful bidders will pay based on the yield-to-maturity that clears the auction, plus any accrued interest. Interest will be paid twice a year, and the full principal will be repaid when the bond matures.

The DMO emphasized that these bonds are backed by the full credit of the Federal Government, making them one of the safest investment options in Nigeria.

Investor interest in fixed-income securities remains high due to attractive yields, tight monetary policies, and strong institutional demand. Analysts note that this N600 billion offer is more measured than April’s N700 billion auction, which included three bonds: a N300 billion 10-year, a N100 billion 7-year, and a N300 billion 5-year bond.

By focusing on domestic borrowing, the government reduces its exposure to foreign exchange risks and global interest rate hikes. However, high local interest rates continue to push up the cost of borrowing.

The bonds come with tax benefits and regulatory advantages. They qualify as trustee investment securities under Nigerian law and are recognized as government securities under the Company Income Tax Act and Personal Income Tax Act. Pension funds and other institutional investors can also enjoy tax exemptions.

These bonds are listed on the Nigerian Exchange and the FMDQ OTC Securities Exchange, allowing investors to trade them easily. Banks can also count them as liquid assets when calculating liquidity ratios.

Subscriptions are facilitated by Primary Dealer Market Makers (PDMMs), including Access Bank, First Bank, Stanbic IBTC, GT bank, Zenith bank, Eco Bank Nigeria, and standard chartered bank Nigeria