In a move to bolster its domestic borrowing program, the Federal Government of Nigeria, through the Debt Management Office (DMO), has announced its intention to raise ₦300 billion through a bond auction scheduled for May 26, 2025.
According to details in the DMO’s recently issued offer circular, the bond offering includes:
- ₦100 billion via the reopening of the 19.30% FGN April 2029 bond, which carries a five-year tenor.
- ₦200 billion via the reopening of the 19.89% FGN May 2033 bond, with a nine-year tenor.
These bonds, though previously issued, are being reopened for fresh subscriptions. Investors can purchase units starting from ₦1,000, with a minimum bid of ₦50,001,000 and subsequent increments in multiples of ₦1,000.
Investment Features
Interest payments will be made semi-annually, while the principal will be paid in full at maturity. Bidders will be required to pay a price that reflects their yield-to-maturity bid, plus any accrued interest up to the settlement date.
The DMO confirmed that the bonds:
- Qualify as trustee investments under the Trustee Investment Act.
- Are tax-exempt for pension fund administrators, in line with the Company Income Tax Act and the Personal Income Tax Act.
- Are listed on the Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange.
- Count as liquid assets for banks in calculating their liquidity ratios.
Economic Context
This bond issuance is part of the government’s broader strategy to finance its budget deficit, stimulate economic growth, and deepen the domestic capital market. The government continues to rely on local borrowing instruments to manage fiscal pressures amid limited access to international markets.
The auction is expected to attract a mix of institutional investors, including banks, pension funds, and asset managers, as demand for high-yield, tax-exempt instruments remains strong.
