FG scales down April bond offer to N700bn as debt pressures persist

The Federal Government will raise N700 billion from the domestic bond market in April 2026, extending a gradual tapering of monthly offers even as concerns over Nigeria’s rising debt burden and servicing costs remain elevated.

According to the April bond offer circular released by the Debt Management Office, the auction is slated for April 27, with settlement on April 29. The issuance will be executed through the re-opening of existing bonds across multiple maturities to enhance liquidity in the secondary market.

The offer comprises 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.

With a minimum subscription set at N50.001 million and units priced at N1,000, the instruments are primarily targeted at institutional investors, including pension funds, banks, and asset managers. The bonds also qualify as liquid assets for banks and benefit from tax exemptions, which continue to support demand.

The April issuance marks a steady decline in monthly borrowing levels, down from N900 billion in January, N800 billion in February, and N750 billion in March. Analysts say the moderation reflects a cautious adjustment to prevailing market conditions rather than a shift away from debt financing.

In March, the government raised N750 billion through a mix of five-, seven-, and 10-year tenors. However, the April structure shows a rebalancing, with a notably smaller allocation to the mid-tenor instrument.

The coupon rates highlight the high-interest-rate environment, with yields hovering around 17.9 per cent for shorter tenors, while the 10-year bond carries a significantly higher rate of 22.60 per cent. Market watchers attribute this to persistent inflation, currency volatility, and global financial uncertainties, which have pushed investors to demand higher returns.

Final pricing will be determined at the auction through a competitive bidding process based on yield-to-maturity, alongside accrued interest.

The elevated yields mirror the tight monetary policy stance of the Central Bank of Nigeria, which has kept interest rates high to rein in inflation. However, the policy has also increased the cost of government borrowing and intensified pressure on fiscal sustainability.

Recent figures underscore the challenge. Nigeria’s debt servicing bill climbed to about N16 trillion in 2025, up from N13.02 trillion in 2024, reflecting a sharp rise in the share of revenue devoted to debt obligations.

Overall public debt stood at approximately N159.28 trillion as of December 2025 and is projected to exceed N170 trillion as newly approved loans are drawn down. This has reignited debate over the sustainability of the country’s borrowing strategy.

Nigeria’s debt trajectory has accelerated over the past decade. Following relative stability after debt relief under former President Olusegun Obasanjo, borrowing rose sharply under former President Muhammadu Buhari, with total debt increasing from about N12 trillion in 2015 to roughly N87 trillion by 2023.

Under President Bola Ahmed Tinubu, borrowing has continued as the government seeks to finance budget deficits and infrastructure projects. In 2026, lawmakers approved an additional $6 billion external loan, alongside facilities such as a $1.57 billion World Bank loan and a £746 million credit for port upgrades.

While authorities insist the borrowing is necessary to drive growth and development, critics warn that weak revenue performance and rising debt service obligations could deepen fiscal vulnerabilities if not carefully managed.