The Federal Government of Nigeria raised N1.94 trillion from bond investors in the first quarter of 2025, according to an analysis of Debt Management Office (DMO) auction results. This amount was significantly lower than the N2.52 trillion raised in the same period last year, reflecting a more measured borrowing approach.

The government initially planned to offer N1.10 trillion in bonds but ultimately allotted N1.94 trillion due to strong investor demand. Total subscriptions reached N2.83 trillion, with more than 70 percent of bids accepted.

Monthly Breakdown:

- January 2025: Offered N450 billion, with bids totaling N669.94 billion

- February 2025: Offered N350 billion, with demand surging to N1.63 trillion

- March 2025: Offered N300 billion, with subscriptions of N530.31 billion

The bond auctions revealed notable market trends. Marginal rates showed significant fluctuation, starting at 21.79 to 22.60 percent in January — a sharp increase from the 15.00 to 16.50 percent range in January 2024. By March, rates had moderated to between 19.00 and 19.99 percent.

Institutional investors demonstrated a strong preference for 7-year and 10-year bonds, typically favored by pension funds and insurance companies due to their long-term liability matching.

The DMO's 2025 strategy marked a shift towards a more targeted approach. Instead of offering multiple bond instruments, the government focused on deepening liquidity in existing bonds and maintaining key benchmark instruments across different tenors.

This conservative borrowing strategy comes amid high interest rates, with the government carefully managing its domestic debt profile. The reduced offer volume and more selective allotment approach suggest a deliberate effort to balance market demand with fiscal prudence.

The bond auctions, which target institutional and high-net-worth investors, do not include the government's separate savings bond programme for retail investors.