Federal government plans to raise N1.8 trillion

 Federal government plans to raise N1.8 trillion from  federal government bond market in  first quarter of 2025

The  Nigerian federal government plans to raise  a maximum of N1.8 trillion from the bond market in the first quarter of 2025, according to the Debt Management Office  (DMO).
The issuance, outlined in the  recently released  federal government bond calendar, features a mix of  reissued and new bonds  in three monthly auctions scheduled for January,  February and March  2025.
This financing effort is part of the government's strategy to address  budget deficits and  finance essential infrastructure.
For 2025, the  federal government is  forecasting a budget deficit of  N13.08 trillion, representing  3.87 percent of the country's  gross domestic product (GDP). Bond offering schedule
The bond  auction schedule includes a  re-launch of the 19.30% FGN APR 2029 bond, which has a remaining  maturity of four years and three months. The government plans to offer between N150 billion and N200 billion in each of the three auctions, making  the bond a key component of the overall  issuance. Similarly, the 18.50% FGN FEB 2031 bond will be re-opened, with a  maturity of six years and one month  from January 2025. This bond will also be offered in the range of N150 billion to N200 billion  through the auction. A new bond,  called FGN JAN 2035, will debut  on the market,  aimed at investors seeking  long-term instruments. With an  initial maturity of 10 years,  the bond will  also be offered  in the  range of N150 billion to N200 billion  in each auction.  Together, the three  classes of bonds  are expected to raise a total of N450 billion to N600 billion  through the auction. If the maximum  bid range is achieved  in all  the auctions, the government would  receive N1.8 trillion for the  quarter.
The auctions are scheduled for January 27, February  24 and March 24, 2025. While the  timing remains subject to change, the structured approach demonstrates the government's focus on meeting  funding needs in a transparent and predictable  manner. Implications for the  economy
The planned bond issuance is expected to play a  key role in addressing Nigeria's fiscal  problems, particularly  the growing budget  deficit.
By tapping into the bond market, the government aims to raise funds for  critical infrastructure projects and other development initiatives. The  case also highlights the government's reliance on domestic borrowing to  supplement other  sources of revenue, such as taxes and external  borrowing. Interest in these bonds is likely  to be  strong due to their competitive  interest rates, especially in a  high-interest environment. The mix of medium- and long-term bonds ensures that a  wide range of investors, from pension funds to individual buyers, will find suitable options  to diversify their portfolios. Furthermore, the  duration of the bonds provides a balance between meeting immediate liquidity needs and spreading  the repayment obligations over an extended  period. The success of these  sales will also  demonstrate investor confidence in the Nigerian economy and the government's fiscal  management. As the economy  faces inflationary pressures and revenue shortfalls,  increasing the  target amount  in the bond market will be  essential to support economic  activity and  ensure that the government  meets its obligations.