The Federal Government has raised N7.62tn from the domestic bond market between January and August 2026 as it continues to rely on fixed-income instruments to finance its budget and other fiscal obligations.
The funds were raised through eight Federal Government of Nigeria bond auctions conducted by the Debt Management Office during the period.
The latest figures highlight the growing importance of domestic borrowing in meeting the government’s financing requirements amid a projected budget deficit of about N31.5tn.
At the August bond auction, the DMO allotted N805.2bn through competitive bids across the January 2035, April 2037 and June 2038 instruments.
Although the amount allotted through competitive bids was below the N1.1tn offered, total allotments rose to about N1.56tn after N752.3bn was sold through non-competitive allotments, according to Cowry Asset Management Limited.
Investor demand remained strong, with total subscriptions reaching N1.7tn. This resulted in a bid-to-cover ratio of 2.1 times, up from 1.9 times recorded at the preceding auction.
The June 2038 bond attracted the highest demand, receiving N821.3bn in bids against N631bn in competitive allotments. It also recorded N742.3bn in non-competitive allotments.
Despite strong investor interest, the DMO maintained a cautious approach to pricing. The June 2038 bond recorded a marginal yield of 17.79 per cent, while the January 2035 instrument attracted subscriptions of N513.6bn but received only N64.1bn in competitive allotments at a marginal yield of 17.15 per cent.
Analysts said the relatively low level of competitive allotments reflected the government’s yield considerations rather than weak investor demand.
Demand for government securities has remained firm as investors seek attractive returns while positioning for a possible decline in yields as inflation continues to moderate.
However, higher returns on short-term Treasury bills have continued to influence investment decisions, contributing to an inverted yield curve, where shorter-dated instruments offer higher yields than some longer-term securities.
The N7.62tn raised through FGN bonds does not include funds obtained through Treasury bills, Sukuk and other debt instruments.
The figures underscore the Federal Government’s continued reliance on the domestic capital market to finance public spending and meet its broader fiscal obligations.
