The Federal Government borrowed N5.08 trillion from Nigeria’s domestic bond market between January and June 2026, representing a 77.8 per cent increase from the N2.86 trillion raised during the same period in 2025, according to Debt Management Office auction data.
The government also expanded its borrowing programme by offering N4.95 trillion in bonds, up from N1.85 trillion a year earlier. Investor demand remained strong, with subscriptions reaching N9.04 trillion, although demand relative to the amount offered declined because of the larger borrowing requirement.
Auction results showed that January and June recorded the highest borrowings, while February and April witnessed lower allotments. More investors participated in the auctions, but the DMO accepted a smaller proportion of bids, indicating a more selective allocation process.
Despite the higher borrowing, the government’s financing costs eased. Average marginal rates fell to about 16.8 per cent in the first half of 2026 from nearly 19.8 per cent in the corresponding period of 2025, reflecting lower borrowing costs.
Long-term instruments, particularly the 22.60 per cent FGN January 2035 bond and the 16.2499 per cent FGN April 2037 bond, attracted the largest share of investor interest and accounted for a significant portion of the funds raised during the period.
Analysts linked the strong demand to Nigeria’s attractive bond yields and improving investor confidence. Earlier figures also showed foreign investors injected $3.23 billion into Nigerian bonds in the first quarter of 2026, supported by the Central Bank’s monetary policy and relative stability in the foreign exchange market.
Economists, however, warned that rising government borrowing could crowd out private sector lending and increase debt-servicing costs.
Market analysts expect bond yields to remain elevated through the third quarter of 2026, with any significant decline unlikely before the final quarter of the year unless inflation eases substantially.
