Nigeria’s Debt Management Office (DMO) has scheduled a Federal Government bond auction for February 23, 2026, aiming to raise N800 billion from the domestic market, according to the official issuance circular released on February 16, 2026.
The offer comprises re-openings of three long-dated instruments: N400 billion of the 17.95% FGN June 2032 bond (7-year maturity), N300 billion of the 19.89% FGN May 2033 bond (10-year maturity), and N100 billion of the 19.00% FGN February 2034 bond (10-year maturity). Settlement is expected on February 25, 2026.
This February 2026 issuance marks a significant 128.6% increase—or an additional N450 billion—compared to the N350 billion offered in February 2025, which included shorter tenors: N200 billion in a 5-year re-opening at 19.30% and N150 billion in a 7-year at 18.50%. By focusing exclusively on 7-year and 10-year maturities this year, the DMO appears intent on extending the average life of Nigeria’s domestic debt stock and easing near-term repayment obligations.
Borrowing costs continue to reflect the prevailing tight monetary environment. The 7-year coupon at 17.95% shows a modest improvement from the 18.50% rate on a similar tenor in February 2025. The 10-year offerings carry coupons of 19.00% and 19.89%, consistent with elevated yields across the curve.
On a month-on-month basis, the February program is scaled back by N100 billion (11.1%) from January 2026’s record N900 billion auction, which featured N300 billion at 18.50% (7-year), N400 billion at 19.00% (10-year), and N200 billion at 22.60% (10-year). The reduction in size and the lower peak coupon on longer-dated paper (down from January’s 22.60%) suggest a degree of stabilization at the long end of the yield curve, though rates remain historically high, clustering between 18% and 20%.
The continued heavy reliance on domestic bond sales underscores the government’s strategy to meet fiscal funding needs through local sources while navigating persistent high interest rates influenced by the Central Bank of Nigeria’s policy framework. Institutional investors, including pension funds and commercial banks, are expected to show strong appetite for these attractive yields.
Market observers note that while the February auction trims back from January’s peak, it still represents more than double last year’s February level, highlighting both the scale of ongoing borrowing requirements and the elevated cost of domestic debt servicing. The outcome of the February 23 auction will provide further clarity on investor demand and the trajectory of funding costs in Nigeria’s fixed-income market.
