The Federal Government of Nigeria has announced plans to raise N300 billion from the bond market through an auction scheduled for Sunday, May 26, 2025. The move is part of the government’s strategy to finance the national budget and support infrastructural development.
This announcement was made by the Debt Management Office (DMO) through an offer circular released on Thursday. According to the DMO, the auction will involve the reopening of two existing Federal Government of Nigeria (FGN) bonds. The first is a five-year bond originally issued in April 2024, with a fixed interest rate of 19.30 percent, maturing in April 2029. The DMO plans to raise N100 billion from this bond. The second is a nine-year bond issued in May 2024, with a 19.89 percent interest rate, maturing in May 2033. The government intends to raise N200 billion from this bond.
Both bonds will be offered in units of N1,000, with a minimum subscription amount of N50,001,000 and additional investments in multiples of N1,000. Interest payments on the bonds will be made twice a year, while the full principal amount will be paid at the end of the bond’s term.
Although these bonds are reopenings of earlier issues, they are being auctioned based on competitive bidding. This means successful investors will pay prices that reflect their yield-to-maturity bids, along with any accrued interest since the last coupon date.
The DMO stated that the bonds meet legal requirements for investment by trustees under the Trustee Investment Act. Additionally, they are exempt from tax for pension funds, as stated in the Company Income Tax Act and the Personal Income Tax Act.
The bonds will also be listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange. Because of this listing, the bonds will qualify as liquid assets for banks, which can use them in calculating their liquidity ratios. This increases their attractiveness to financial institutions looking to balance their portfolios.
In a related development, the DMO also confirmed that it successfully allotted N4.3 billion worth of Federal Government Savings Bonds during its May 2025 offering. These savings bonds are typically targeted at retail investors and help encourage public participation in the country’s debt market.
The upcoming bond auction is expected to attract significant attention from institutional investors such as pension funds, insurance firms, and banks. Analysts say the attractive interest rates, combined with the government’s tax incentives, will likely result in strong demand.
With Nigeria working to fund its budget deficit and reduce reliance on external borrowing, local bond auctions like this one have become an important source of domestic financing. Experts believe that consistent bond issuances will not only help the government manage its cash flow but also deepen the domestic capital market and promote long-term savings.
As the auction date approaches, financial analysts and investors are watching closely to see the level of interest and what it may indicate about investor confidence in the Nigerian economy and government fiscal management.
