The Federal Government of Nigeria, through the Debt Management Office (DMO), has announced plans to raise ₦200 billion via a bond auction as part of efforts to manage public debt sustainably and boost liquidity in the domestic capital market.
In a public offer document released on Thursday, the DMO disclosed that the auction, scheduled for Monday with settlement fixed for Wednesday, would consist of two instruments — the reopening of the FGN June 2032 bond at 17.95% and the issuance of a new five-year FGN AUG 2030 bond valued at ₦100bn.
The June 2032 reopening maintains its coupon rate of 17.95%, while the new five-year bond is yet to be assigned a coupon rate, which will be determined at the close of the auction.
According to the DMO, the minimum subscription amount is ₦5,000, with increments in multiples of ₦1,000 up to a maximum of ₦50 million per investor.
Interest on the instruments will be paid semi-annually, making the offer attractive to both institutional and retail investors seeking stable income in an inflationary environment.
The move comes barely two weeks after the government floated the August 2025 Federal Government of Nigeria Savings Bonds, which recorded strong subscription levels.
That offering had promised investors annual returns of 14.401% for a two-year note maturing in August 2027 and 15.401% for a three-year note due August 2028.
Market analysts say Nigeria’s bond auctions have continued to enjoy healthy patronage, particularly from pension funds, insurance firms, and high-net-worth individuals seeking to hedge against inflation while earning risk-free returns.
Results from the July auction confirmed this trend, with the DMO receiving a total of 109 bids for the FGN June 2032 bond.
Of these, 59 bids were successful, leading to an allotment of ₦172.5bn for the June 2032 paper and ₦13.43bn for the April 2029 tranche.
The July sale also revealed marginal rates of 15.69% for the 19.30% FGN April 2029 (five-year bond) and 15.90% for the 17.95% FGN June 2032 (seven-year bond).
Despite the lower marginal yields, investors benefit from the higher original coupon rates of 19.30% and 17.95%, respectively, reflecting the government’s effort to manage debt servicing costs.
United Capital Plc, a leading investment firm, highlighted the advantages of FGN bonds in a recent note to clients.
According to the firm, FGN bonds offer guaranteed returns if held to maturity, provide competitive interest compared to savings deposits, and are exempt from tax on interest income.
In addition, the certificates can serve as collateral for bank loans, giving investors an extra layer of financial flexibility.
Most importantly, being backed by the Federal Government, the securities are regarded as risk-free instruments, making them one of the safest investments in Nigeria’s financial ecosystem.
The planned ₦200bn bond sale comes at a time when the Federal Government is grappling with fiscal pressures, rising debt obligations, and the need to fund infrastructure projects.
Analysts say the proceeds will help plug financing gaps in the 2025 budget while supporting the development of Nigeria’s domestic debt market.
Financial experts also note that by encouraging broader participation through a low entry point of ₦5,000, the DMO is promoting financial inclusion, enabling ordinary Nigerians to invest in government securities previously dominated by institutional players.
With inflation hovering above 25% and currency volatility still a concern, appetite for government bonds is expected to remain strong in the near term.
However, experts caution that sustained reliance on domestic borrowing may crowd out private sector access to credit, potentially slowing growth in the real sector.
Despite these concerns, the upcoming ₦200bn bond auction underscores the government’s strategy of leveraging the capital market to finance its spending priorities while deepening the country’s financial markets.