The Federal Government raised ₦5.08 trillion from Nigeria’s domestic bond market in the first six months of 2026, representing a 77.8 per cent increase from the ₦2.86 trillion raised during the same period in 2025, according to an analysis of Debt Management Office (DMO) auction results.
The increase came despite a decline in borrowing costs, reflecting strong investor confidence in government securities. During the review period, the DMO offered ₦4.95 trillion worth of bonds, up from ₦1.85 trillion in the corresponding period of 2025, while investor subscriptions exceeded ₦9 trillion, indicating sustained demand for federal debt instruments.
The government’s borrowing peaked in January, with total bond allotments of about ₦1.68 trillion, followed by June, when approximately ₦1.22 trillion was raised. Market data also showed that the 22.60 per cent FGN January 2035 bond attracted the highest investor interest, accounting for roughly ₦1.52 trillion in allotments across multiple reopening auctions.
Despite the larger borrowing programme, the government’s financing costs eased. Average marginal rates on bond issuances declined to about 16.78 per cent in the first half of 2026 from 19.84 per cent during the same period in 2025, suggesting improved funding conditions even as the Federal Government expanded domestic borrowing to finance its fiscal needs.
Analysts say the strong appetite for government bonds underscores investors’ preference for relatively low-risk fixed-income assets amid Nigeria’s high-interest-rate environment. However, economists have cautioned that continued heavy domestic borrowing could increase public debt and reduce credit available to the private sector if not carefully managed.
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