The Nigerian government has successfully raised a substantial N669.94 billion from its January 2025 bond auction, exceeding its initial target by a significant margin. This achievement underscores strong investor confidence in the country’s debt instruments, despite the challenging economic climate.
The Debt Management Office (DMO) announced the successful auction outcome on Tuesday, revealing robust demand across all three bond tenors offered. The 19.30% FGN APR 2029 bond was allotted N78.86 billion at a yield of 21.79%, while the 18.50% FGN FEB 2031 bond attracted N159.29 billion at a 22.50% yield. The 22.60% FGN JAN 2035 bond garnered the highest allocation, securing N368.31 billion at a yield of 22.60%.
“This bond auction marks another significant milestone in the government’s efforts to finance critical infrastructure projects and support budgetary needs through domestic borrowing,” the DMO stated in its official announcement.
The total allotment across the three tenors reached N606.46 billion, surpassing the initial target of N450 billion by a substantial N219.94 billion. This outperformance follows a trend of increased investor appetite for government bonds, exceeding the N360 billion offered in January 2024 and the N120 billion offered in December 2024.
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The DMO emphasized that the auction witnessed strong investor participation across all tenors, with competitive yields reflecting prevailing market conditions. “The robust subscription levels underscore continued investor confidence in the government’s debt instruments, driven by attractive yields and Nigeria’s stable credit ratings,” the DMO further explained.
This successful bond auction comes as the Nigerian government navigates a period of significant fiscal challenges. In 2024, the government borrowed an estimated N5.84 trillion from the FGN bond market to address its budget deficit. While this figure represents a marginal decline compared to the N5.85 trillion borrowed in 2023, it highlights the government’s continued reliance on domestic borrowing to finance its expenditures.
Looking ahead, the Nigerian government faces a substantial budget deficit of N13.08 trillion in 2025. To address this gap, the government will likely need to continue to tap into the domestic bond market, seeking to maintain investor confidence while navigating the complexities of the current economic landscape.
