The Federal Government borrowed a total of N1.94tn from bond investors in Q1 2025, according to bond auction results from the Debt Management Office.

This amount was raised through Federal Government of Nigeria (FG) bonds over three months and excludes borrowings from the FGN savings bond programme.

The figure represents the total amount allotted to investors in the monthly FGN bond auctions for January, February, and March 2025.

It is reported that the government initially offered N1.10tn in bonds for the quarter but allotted N1.94tn due to strong investor demand, which raised total subscriptions to N2.83tn.

In the January auction, the government offered N450bn across three instruments: the 5-year 19.30% FGN APR 2029, the 7-year 18.50% FGN FEB 2031, and the newly introduced 10-year 22.60% FGN JAN 2035 bond.

Investors submitted bids totaling N669.94bn, with the government allotting N601.04bn.

In January, there was no non-competitive allotment, meaning the entire amount was taken through competitive bidding. In comparison, January 2024 saw the government offer N360bn, receive N604.56bn in subscriptions, and allot N418.2bn.

By February 2025, the government offered N350bn across the 5-year and 7-year bonds, but demand surged to N1.63tn, significantly exceeding the offer.

The DMO allotted N910.39bn, maintaining a cautious approach despite the huge demand. This was a step down from February 2024, when the DMO had offered N2.5tn in bonds and allotted N1.495tn. February 2024 saw the highest activity, with N2.5tn on offer and N1.90tn subscribed. The DMO allotted N1.495tn across two bonds: the 7-year 18.50 per cent FGN FEB 2031 and the 10-year 19.00 per FGN FEB 2034.

Subscription stood at N530.31bn, and the government allotted N423.68bn. This comprised N271.23bn in competitive bids and N152.45bn in non-competitive allotments.

Overall, in Q1 2025, the Federal Government offered N1.10tn in FGN bonds, received N2.83tn in subscriptions, and allotted N1.94tn.

This means over 70% of total subscriptions were accepted, a notable rise from Q1 2024, when the DMO accepted 80.8% (N2.52tn out of N3.12tn).

However, the Q1 2024 figure was based on a significantly higher total offer of N3.31tn.

A year-on-year breakdown shows that the N1.94tn raised in Q1 2025 is lower than the N2.52tn raised in Q1 2024, but the government adopted a more restrained borrowing strategy in 2025, which is likely due to the high interest rates.

While offers in Q1 2024 totalled N3.31tn — largely due to a massive N2.5tn offer in February alone — the 2025 figure was significantly lower at N1.10tn.

This suggests the government has slowed its domestic borrowing pace despite strong market interest. The lower offer volume in 2025 was matched by a more cautious approach to allotments, even amid continued oversubscription.

Marginal rates in Q1 2025 also signaled a market adjustment. In January, rates ranged from 21.79% to 22.60%, a sharp rise from January 2024’s 15.00% to 16.50% range.

By March 2025, marginal rates had eased slightly to between 19.00 and 19.99 per cent, suggesting a possible stabilisation in interest rate expectations or a return of investor confidence in macroeconomic management.

The 7-year and 10-year bonds remained the most sought after in both years, reflecting institutional investors’ preference for medium- to long-term risk-free assets.

Pension fund administrators and insurance firms typically favor these bonds due to their alignment with long-term liabilities.