The Federal Government, through the Debt Management Office (DMO), is set to raise N700 billion from the domestic debt market in April 2026, sustaining its borrowing momentum amid rising yields on long-term instruments.
Details from the April 2026 FGN Bond Offer Circular show the auction will take place on April 27, with settlement scheduled for April 29.
The issuance will be executed through the re-opening of existing bonds across three maturities, underscoring the government’s strategy to deepen liquidity in benchmark instruments rather than introduce new tenors.
Under the offer, N300 billion will be raised from the 17.945 per cent FGN August 2030 bond, N100 billion from the 17.95 per cent FGN June 2032 bond, and another N300 billion from the 22.60 per cent FGN January 2035 bond.
The structure signals a clear tilt towards longer-dated securities, with the 10-year instrument accounting for a significant share of the offer. This approach allows the government to lock in funding over a longer horizon while managing refinancing risks.
However, the reduced allocation to the 7-year bond suggests more cautious demand expectations in the mid-tenor segment, as investors continue to factor in inflationary pressures and global economic uncertainty.
As with previous issuances, the bonds will be offered in units of N1,000, with a minimum subscription of N50.001 million, effectively targeting institutional investors such as pension funds, banks and asset managers. The instruments also qualify as liquid assets for banks and enjoy tax exemptions under existing regulations, enhancing their appeal in a high-yield environment.
Month-on-month, the government has slightly trimmed its borrowing target from N750 billion in March to N700 billion in April, reflecting a modest adjustment rather than a shift in overall strategy.
The composition of the offer, however, has changed. While the 10-year bond allocation remains unchanged at N300 billion, the 5-year segment has been increased, and the 7-year offer cut significantly, from N200 billion in March to N100 billion in April, indicating a recalibration along the yield curve.
The continued reliance on bond re-openings also highlights a deliberate effort to build depth and liquidity in existing benchmark securities, improving pricing efficiency and secondary market activity.
Notably, the coupon rates attached to the April issuance underscore the persistence of elevated yields in Nigeria’s fixed-income market. While the 5-year and 7-year bonds retain coupon rates of about 17.945 per cent and 17.95 per cent, respectively, the 10-year bond stands out at 22.60 per cent, a sharp increase from the 19.89% offered on a comparable instrument in March.
This widening gap reflects investor demand for higher returns on longer-duration assets, driven by concerns over inflation, exchange rate volatility and broader global risks.
Final yields, however, will be determined at auction, where investors bid based on their preferred yield-to-maturity, alongside accrued interest.
The high-rate environment mirrors broader monetary conditions, as the Central Bank of Nigeria (CBN) maintains a tight stance to curb inflation. This, in turn, continues to push up domestic borrowing costs and intensify pressure on government debt servicing.
Recent auction results reinforce this trend. At the March 30 bond auction, the DMO raised borrowing costs while cutting allotments to N485.50 billion, even amid strong investor demand. Stop rates rose sharply compared to earlier auctions, signalling a clear shift in yield dynamics across the curve.
