The Federal Government raised N5.08 trillion from the domestic bond market in the first six months of 2026, representing a 77.8% increase over the N2.86 trillion raised in the same period in 2025, according to an analysis of Debt Management Office auction results.
The increase came despite a decline in borrowing costs, with average marginal rates easing compared with last year. Investor appetite remained strong, with subscriptions exceeding N9 trillion over the six months.
The government also significantly increased the amount of bonds offered to investors—from N1.85 trillion in 2025 to N4.95 trillion in 2026. The 22.60% FGN January 2035 bond remained the government’s largest funding instrument, attracting N2.30 trillion in subscriptions.
The data also point to a decline in domestic borrowing costs, with marginal rates falling from 22.60% in 2025 to 18.35% in 2026.
Key Points:
The government’s aggressive borrowing is financing the fiscal deficit but increasing public debt
Banks are favouring low-risk government securities over lending to businesses, crowding out private sector investment
Marginal rates have eased from 22.60% to 18.35%, reducing borrowing costs
Investor demand remains strong, with total subscriptions exceeding N9 trillion
The 22.60% FGN January 2035 bond accounted for the largest share of borrowing (N1.52tn allotments)
The CBN’s aggressive monetary tightening cycle (MPR at 26.50%) continues to influence the bond market
