FGN to Repay N1.03 Trillion Bond on January 22: Implications for Nigeria’s Debt and Naira

The federal government is set to repay up to N1.03 trillion in bond maturities on January 22, 2026, marking one of the largest domestic debt obligations for the year. This repayment is part of the government’s ongoing commitment to domestic bond investors and highlights the critical role of FGN Bonds in funding fiscal operations.

Analysts at FMDA Research note that nearly 40% of the maturing bonds this week are concentrated in the 12.50 percent FGN January 2026 bond, which also matures on January 22. The concentration of these inflows could influence market dynamics in the coming days. “Market participants should monitor reinvestment patterns closely, as large inflows may increase foreign exchange demand and put short-term pressure on the naira,” the report stated.

The repayment occurs against the backdrop of Nigeria’s expanding public debt. According to the Medium-Term Expenditure Framework (MTEF) 2026–2028, total public debt reached $94.2 billion as of December 31, 2024, almost evenly split between domestic (51.4%) and external debt (48.5%). By March 31, 2025, total debt rose to $97.2 billion, driven largely by increased domestic borrowings and currency depreciation, translating to N149.3 trillion in naira terms.

Domestic bonds remain a cornerstone of government financing, despite a preference for concessional external funding. Instruments such as FGN Bonds, Treasury Bills, Savings Bonds, Sukuk, Green Bonds, and Promissory Notes all contribute to funding public operations. The January 22 repayment highlights the importance of these instruments, as weak reinvestment could strain liquidity and exert pressure on the naira.

Fiscal sustainability continues to be a concern. Debt service costs reached N13.12 trillion in 2024, representing 46% of total FGN expenditure and 77.5% of government revenues. Large domestic maturities like the upcoming N1.03 trillion repayment underline the need for strong domestic resource mobilisation to prevent rollover risks, while enabling the government to maintain spending on infrastructure, healthcare, and education.

source: leadership