The Federal Government, through the Debt Management Office (DMO), has opened subscriptions for N750 billion worth of Federal Government of Nigeria (FGN) bonds for March 2026.
Details from the March 2026 bond offer circular published on the DMO’s website on Wednesday show that the government is offering three reopened instruments: N250 billion for the 17.945% FGN August 2030 bond, N200 billion for the 17.95% FGN June 2032 bond, and N300 billion for the 19.89% FGN May 2033 bond, bringing the total to N750 billion.
The auction is scheduled for March 30, 2026, with settlement on April 1, 2026. As with previous issuances, the bonds will be sold via auction, where investors bid based on yield-to-maturity, while coupon rates remain fixed due to the re-opening structure.
This comes against the backdrop of sustained fiscal pressures and rising domestic borrowing needs, with the government continuing to rely heavily on the local bond market to finance budget deficits and refinance maturing obligations.
What the bond offer circular shows
A month-on-month comparison shows that the government reduced its bond offer size by N50 billion in March relative to February 2026.
In February, the DMO offered a total of N800 billion across three instruments: N400 billion for the 17.95% June 2032 bond, N300 billion for the 19.89% May 2033 bond, and N100 billion for the 19.00% February 2034 bond.
The reduction to N750 billion in March reflects a more calibrated borrowing approach, likely influenced by a combination of improved liquidity conditions as oil prices surge and efforts to manage rising debt service costs.
Notably, the composition of the issuance also shifted. While February included a longer-tenor 2034 bond, March’s offering tilts more toward mid-tenor instruments, particularly the 2030 and 2032 bonds.
From a strategy standpoint, the slight contraction in offer size could also indicate an attempt to avoid excessive upward pressure on yields, particularly as the government continues to crowd the domestic debt market.
Rates remain elevated, signalling sustained cost pressures
Despite the marginal reduction in borrowing size, interest rates across the bond offerings remain elevated, reinforcing the high cost of domestic debt.
The March issuance features coupon rates of 17.945% for the 2030 bond, 17.95% for the 2032 bond, and 19.89% for the 2033 bond.
These are broadly in line with February’s levels, where the 2032 bond carried a 17.95% coupon, while the 2033 and 2034 instruments offered 19.89% and 19.00%, respectively.
What this means
The persistence of high rates highlights continued tight financial conditions, even as the Central Bank of Nigeria (CBN) has begun easing policy marginally.
Crucially, because these are re-openings, actual borrowing costs will depend on the stop rates determined at auction.
However, the elevated coupon benchmarks suggest that yields are likely to remain near current levels, barring a sharp shift in liquidity or inflation expectations.
From a fiscal perspective, this keeps debt servicing costs elevated. With domestic borrowing forming a significant share of Nigeria’s debt stock, sustained high yields could further strain public finances, especially as interest payments already consume a large portion of government revenue.
