Nigeria: FG Targets N1.8tn from Bond Market in Q1 2025

The Federal Government aims to generate N1.8tn from the bond market in the first quarter of 2025, as revealed by the Debt Management Office (DMO).

This plan, outlined in the recently released FGN Bond Issuance Calendar, includes a mix of re-opened and new bonds, with auctions scheduled for January, February, and March 2025.

The bond issuances are part of a broader strategy to address a projected budget deficit of N13.08tn in 2025, representing 3.87 percent of Nigeria’s Gross Domestic Product (GDP). Proceeds from the bonds will finance critical infrastructure and help close fiscal gaps.

The calendar specifies the re-opening of the 19.30 percent FGN APR 2029 bond, which has a remaining tenor of four years and three months. The government plans to offer between N150bn and N200bn per auction across three months, positioning this bond as a central component of the funding strategy.

Additionally, the 18.50 percent FGN FEB 2031 bond, with six years and one month left as of January 2025, will also be re-opened and offered within the same N150bn to N200bn range per auction.

A new bond, the FGN JAN 2035, will be introduced to cater to investors seeking longer-term options. With an original tenor of 10 years, this bond will also target offers between N150bn and N200bn per auction.

Should the government achieve the upper limit of its target range in all three auctions, it could raise as much as N1.8tn by the end of the quarter. The auctions are set for January 27, February 24, and March 24, 2025.

While the bond calendar is subject to revisions, it underscores the government’s focus on transparency and predictability in meeting its funding requirements.

In 2024, the Federal Government borrowed an estimated N5.84tn from the FGN bond market to address its budget deficit. This represented a slight decline of 0.17 percent compared to the N5.85tn borrowed in 2023, as reported by the DMO.

Despite offering N5.72tn in FGN bonds last year, total subscriptions reached N7.09tn, reflecting sustained investor confidence in government securities.