FG Plans N800 Billion Bond Sale as Yields Remain Elevated

The Federal Government of Nigeria, through the Debt Management Office (DMO), has announced plans to raise N800 billion via its February 2026 Federal Government bond auction. The planned offering represents a significant increase compared to the same period last year, though slightly lower than January’s record-sized auction, reflecting the government’s continued reliance on the domestic debt market amid elevated borrowing costs.

According to the bond offer circular published on the DMO website, the February 2026 programme comprises three instruments: N400 billion of the 17.95% FGN June 2032 bond (7-year re-opening), N300 billion of the 19.89% FGN May 2033 bond (10-year re-opening), and N100 billion of the 19.00% FGN February 2034 bond (10-year re-opening). The auction is scheduled for February 23, 2026, with settlement on February 25, 2026.

By comparison, February 2025’s offering totaled N350 billion, consisting of N200 billion of the 19.30% FGN April 2029 bond (5-year re-opening) and N150 billion of the 18.50% FGN February 2031 bond (7-year re-opening). The year-on-year increase of N450 billion, or 128.6%, underscores the government’s need to raise more than double the amount from last year’s corresponding month.

The maturity structure has shifted toward longer tenors, with the February 2026 programme entirely concentrated on 7-year and 10-year bonds, signaling a deliberate strategy to extend the average maturity of domestic debt and reduce near-term refinancing pressures. The 7-year bond carries a coupon of 17.95%, slightly lower than the 18.50% seen in February 2025, while the 10-year instruments bear coupons of 19.00% and 19.89%, reflecting the persistent high interest rate environment. Overall, borrowing costs for long-dated government debt remain near 19%, consistent with tight liquidity and sustained monetary policy restraint.

A month-on-month comparison with January 2026 shows that the February offer is lower than January’s N900 billion auction. January’s programme included N300 billion of the 18.50% FGN February 2031 bond (7-year re-opening), N400 billion of the 19.00% FGN February 2034 bond (10-year re-opening), and N200 billion of the 22.60% FGN January 2035 bond (10-year re-opening). The reduction of N100 billion in February represents an 11.1% decline from January, accompanied by slightly moderated rates. The 7-year rate fell from 18.50% in January to 17.95% in February, while the long-end 10-year papers are priced lower than January’s 22.60% benchmark.

Separately, the Debt Management Office announced allotment results for the February 2026 FGN Savings Bond subscription, which offered two instruments—a two-year and a three-year bond. Total subscriptions exceeded N5.9 billion, demonstrating sustained retail investor interest in government-backed securities despite interest rate volatility. The two-year bond, carrying a 14.356% coupon, attracted N1.514 billion from 2,631 successful subscriptions, while the three-year bond, at a 15.356% coupon, raised N4.398 billion from 2,195 subscriptions. Coupon payments on both bonds are scheduled quarterly, providing investors with a steady income stream.

The FGN Savings Bond programme was created to deepen the domestic bond market and encourage wider retail participation, particularly from small and medium-scale investors who may not typically engage in primary market auctions of treasury instruments. The bonds are fully backed by the Federal Government, making them relatively low-risk, with guaranteed principal repayment at maturity. The DMO conducts monthly offers to maintain consistent retail engagement and promote financial inclusion while generating a steady funding source for the government.

The February 2026 offerings demonstrate a calibrated approach to domestic borrowing, balancing the government’s need to raise funds for fiscal operations with the cost of debt in a high-interest rate environment. With continued double-digit yields and structured quarterly payouts, both institutional and retail investors are likely to view the FGN bond and savings bond programmes as attractive fixed-income investment options in Nigeria’s evolving financial markets.