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The Federal Government of Nigeria borrowed a total of N1.94 trillion from bond investors in the first quarter of 2025, according to an analysis of bond auction results released by the Debt Management Office (DMO). This amount was raised through Federal Government of Nigeria bonds over three months and does not include borrowings through the FGN savings bond programme.

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The government initially offered N1.10 trillion in bonds but ended up allotting N1.94 trillion due to strong investor interest, pushing total subscriptions to N2.83 trillion. In January, the government offered N450 billion across three instruments, and investors responded with bids totalling N669.94 billion.

Gita Gopinath, the IMF’s First Deputy Managing Director, recently stated, “We (IMF) assess debt sustainability for countries every year, and we did this for Nigeria in our report for 2024. Our assessment was that the risk of sovereign stress for Nigeria is moderate and not high risk.” However, she warned that this assessment does not give Nigeria a license to take on more debt.

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Experts at investment house Afrinvest emphasised the need for immediate action to address Nigeria’s debt profile, recommending a long-term strategy focused on reducing debt reliance, strengthening fiscal position, and promoting real economic growth.

“We believe that Nigeria’s debt profile requires immediate action to forestall further deterioration,” said experts at Afrinvest. “A long-term strategy should prioritise reducing reliance on debt and strengthening Nigeria’s fiscal position through prudent spending, improved tax collection, and efficient budget allocation, all within the framework of real economic growth.

The DMO’s bond auction strategy in 2025 shows a shift towards issuing fewer instruments per auction while raising more from each bond. Rather than flooding the market with a wide array of maturities, the government focused on deepening liquidity in existing instruments through re-openings and maintaining benchmark bonds across key tenors.

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“This approach not only supports price discovery in the secondary market but also reduces the complexity of managing a fragmented debt profile,” said analysts.

The 7-year and 10-year bonds continued to attract the strongest demand across both years, indicating a preference by institutional investors for medium- to long-term risk-free assets. These bonds are typically favoured by pension fund administrators and insurance firms due to their matching duration with long-term liabilities.

The Federal Government of Nigeria expanded its bond listings with an additional 910.3 million units of its existing February 2025 bonds on the Nigerian Exchange Limited. A statement by NGX disclosed that the supplementary listing included 305.36 million units of the 19.30 percent FGN APR 2029 bond and 605.03 million units of the 18.50 percent FGN FEB 2031 bond.

FGN bonds are debt securities issued by the Federal Government to raise capital for infrastructure projects and other development initiatives. With the new issuance, the total outstanding units for the 19.30 percent FGN APR 2029 bond rose from 463.16 million to 768.52 million, while the 18.50 percent FGN FEB 2031 bond increased from 2.1 billion to 2.71 billion units.

As Nigeria continues to navigate its debt landscape, experts emphasize the need for prudent management and a strategic approach to borrowing

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