By Olakanmi Bankole,Abuja
Nigeria’s Debt Management Office (DMO) plans to raise ₦900 billion from the domestic bond market in January 2026, signalling the Federal Government’s continued reliance on local borrowing to fund the budget and refinance maturing obligations.
The proposed fund raise, to be executed through the Federal Government of Nigeria (FGN) bond auction programme, is expected to attract strong interest from pension funds, asset managers and other institutional investors seeking relatively stable returns amid high interest rates. Market analysts say the size of the auction reflects both rising fiscal pressures and the government’s strategy of deepening the domestic debt market to reduce exposure to external borrowing risks.
According to market expectations, the January auction will likely feature a mix of reopening existing bond tenors, allowing the government to lengthen its debt maturity profile while managing refinancing risks. Yields are also expected to remain elevated, in line with prevailing monetary tightening and liquidity conditions in the financial system.
The planned issuance comes against the backdrop of rising public debt levels and increased debt service costs, which have continued to consume a significant portion of government revenue. However, officials have maintained that domestic borrowing remains a more sustainable option, given volatile global financial conditions and exchange rate pressures associated with foreign debt.
Analysts note that while the bond offer could provide liquidity support to the government, sustained reliance on domestic borrowing may crowd out private sector credit if not carefully managed. They add that fiscal consolidation and improved revenue generation will be critical to easing pressure on the debt market over the medium term.
The January 2026 bond auction is expected to set the tone for government borrowing activities in the new year, with investors closely watching pricing, demand levels and signals on fiscal and monetary policy coordination.
