The Federal Government of Nigeria is set to raise between N900 billion and N1.2 trillion through the domestic bond market in the second quarter (Q2) of 2025, according to the latest bond issuance calendar released by the Debt Management Office (DMO). This target represents a notable decrease from the N1.8 trillion benchmark set in the first quarter (Q1) of the year.
This development comes as the government seeks to manage a complex fiscal environment, with inflation still elevated, oil revenues underperforming, and a substantial N13.08 trillion budget deficit—equivalent to 3.87% of the nation’s GDP.
Bond Auctions Scheduled
The DMO’s calendar outlines three bond auction dates—April 28, May 26, and June 23, 2025—with each month featuring two bond offerings. The estimated monthly issue size ranges from N300 billion to N400 billion, featuring a mix of re-opened and newly issued bonds.
Compared to Q1, where three bonds were offered monthly at an estimated N450 billion to N600 billion per month, the Q2 issuance strategy is more conservative. Each bond in Q2 is expected to fall within the N150 billion to N200 billion range.
Instruments and Offerings
In April and May, the DMO will re-open two previously issued bonds: the 19.30% FGN APR 2029 and the 19.89% FGN MAY 2033, with respective remaining tenors of around four and six years. These bonds will maintain investor familiarity while leveraging established demand.
In June, two new instruments will debut: the FGN JAN 2030 (five-year tenor) and the FGN JAN 2032 (seven-year tenor). While coupon rates for these offerings are yet to be disclosed, they are anticipated to reflect prevailing market rates, which currently hover around 19% to 20%.
Strategic Shift in Debt Management
The lowered issuance target in Q2 suggests a strategic shift amid evolving market conditions. The government may be responding to strong demand in Q1, as well as broader macroeconomic signals, including the Central Bank of Nigeria’s benchmark interest rate, which stands at 27.5%, and March’s inflation figure of 24.23%.
By scaling back issuance while maintaining regular auctions, the DMO appears focused on sustaining investor confidence and ensuring liquidity stability in the market.
Market Appeal and Regulatory Benefits
FGN bonds continue to appeal to institutional investors due to their high yields and regulatory incentives. These instruments qualify as liquid assets for banks, are tax-exempt for pension funds and other institutional investors, and are trustee-eligible. Additionally, they will be listed on both the Nigerian Exchange (NGX) and FMDQ OTC Securities Exchange, enhancing secondary market activity.
As Nigeria balances fiscal needs with investor appetite, the Q2 bond issuance will play a key role in financing the government’s priorities while preserving market stability.
