The Debt Management Office (DMO) has announced plans by the Federal Government of Nigeria (FGN) to raise ₦900 billion through the reopening of three Federal Government bonds at its January 2026 bond auction.
According to a circular issued by the DMO on Monday, the auction is scheduled for January 26, 2026, with settlement expected on January 28, 2026. The offer spans medium- and long-term maturities, giving investors a range of duration options across the yield curve.
What the DMO is offering
The January auction will feature three reopened FGN bond instruments with a combined target of ₦900 billion:
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₦300 billion from the 18.50% FGN February 2031 bond
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₦400 billion from the 19.00% FGN February 2034 bond
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₦200 billion from the 22.60% FGN January 2035 bond
Each bond is offered at ₦1,000 per unit, with a minimum subscription of ₦50,001,000 and additional purchases in multiples of ₦1,000.
The coupon rates on these bonds are fixed, while successful bidders will pay a price that reflects the yield-to-maturity at which the auction clears, plus any accrued interest. Interest payments will be made semi-annually, and principal will be repaid in full at maturity under a bullet repayment structure.
Strong demand for government securities
DMO data shows that total FGN bond allotments in 2025 reached about ₦5.12 trillion, highlighting sustained investor appetite for government securities despite a high-interest-rate environment.
This strong participation underscores the role of FGN bonds as a preferred asset class for pension funds, insurance companies, banks, and other institutional investors seeking predictable returns and low credit risk.
Why the government uses bond reopenings
The FGN has consistently relied on bond reopenings as a strategic tool to finance budget deficits while deepening Nigeria’s domestic debt market.
Reopened bonds allow the government to raise funds through existing instruments with known coupon rates, providing pricing certainty for investors and reducing the administrative costs associated with issuing entirely new securities. They also improve market liquidity and help strengthen the domestic benchmark yield curve, which is critical for pricing other fixed-income instruments.
Key incentives for investors
Investors participating in the January 2026 auction will benefit from several statutory and regulatory advantages:
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The bonds qualify as approved investments under the Trustee Investment Act.
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They are recognised as government securities under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA), making them eligible for tax exemptions.
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The bonds will be listed on Nigerian Exchange Limited (NGX) and the FMDQ OTC Securities Exchange, ensuring transparency and secondary market tradability.
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FGN bonds count as liquid assets for banks in the computation of liquidity ratios and are backed by the full faith and credit of the Federal Government.
Applications for the auction must be submitted through authorised Primary Dealer Market Makers (PDMMs), in line with the DMO’s guidelines.
The bigger picture
The January 2026 bond auction forms part of the FGN’s broader domestic borrowing strategy, aimed at financing budgetary obligations while offering investors stable, long-term investment options. At the same time, it supports the continued growth and sophistication of Nigeria’s domestic debt market.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
