The Federal Government raised N5.08tn from the domestic bond market in the first six months of 2026, marking a 77.8 per cent increase from the N2.86tn raised during the corresponding period of 2025, an analysis of Debt Management Office auction results by The PUNCH has shown.

The increase came despite a decline in borrowing costs, with average marginal rates easing compared with last year, even as investor appetite remained strong, with subscriptions exceeding N9tn over the six-month period.

The DMO auction results showed that the Federal Government allotted N5.08tn worth of bonds between January and June 2026, compared with N2.86tn allotted during the same period in 2025, representing an increase of N2.22tn. The figures include both competitive and non-competitive allotments disclosed in the auction results.

The government also significantly increased the amount of bonds offered to investors during the review period. Between January and June 2026, it offered N4.95tn worth of bonds, compared with N1.85tn in the corresponding period of 2025. This represents an increase of N3.10tn, or 167.6 per cent, reflecting a more aggressive domestic borrowing programme.

Investor demand also strengthened in nominal terms. Total subscriptions rose to N9.04tn in the first half of 2026 from N4.37tn a year earlier, an increase of N4.67tn or about 107 per cent.

However, demand moderated when measured against the size of the government’s offer. While subscriptions were equivalent to 236.1 per cent of the amount offered in the first half of 2025, the ratio declined to 182.6 per cent in the corresponding period of 2026. This suggests that although investors committed substantially more money, the increase did not keep pace with the sharp expansion in borrowing requirements.

A further analysis of the auction data showed that investors submitted 2,823 bids across all bond auctions in the first six months of 2026, up from 1,621 bids in the corresponding period of 2025.

Successful bids also increased from 926 to 1,449 over the period. However, the proportion of successful bids declined to 51.3 per cent in 2026 from 57.1 per cent in 2025, indicating that the DMO became more selective in accepting bids despite stronger participation.

The government’s monthly borrowing profile showed significant differences across the six months. January recorded the highest borrowing during the review period, with N1.54tn allotted to competitive investors and total allotments of about N1.68tn after including non-competitive allocations, compared with N601.04bn in January 2025.

June followed with total allotments of N1.22tn, compared with just N100bn during the corresponding month of 2025, making it one of the strongest months for domestic debt issuance.

May also witnessed a sharp increase, with N614.51bn allotted through competitive bids and total allotments rising to N894.51bn after the inclusion of a N280bn non-competitive allocation for the 16.2499 per cent FGN April 2037 bond. This compares with N300.69bn raised in May 2025.

Borrowing was relatively lower in February and April. The DMO allotted N524.28bn in February 2026, down from N910.39bn in February 2025, while April allotments fell to N276.79bn from N520.90bn recorded during the corresponding period last year.

March was the only other month to record an increase, with allotments rising to N485.50bn from N423.68bn.

The data also point to a decline in the government’s domestic borrowing costs. Marginal rates across the various bond instruments ranged between 15.50 per cent and 18.35 per cent during the first half of 2026. In comparison, marginal rates ranged from 17.75 per cent to 22.60 per cent during the corresponding period of 2025.

The simple average marginal rate across all instruments declined to about 16.78 per cent in the first six months of 2026 from about 19.84 per cent in the same period of 2025. Similarly, the allotment-weighted average marginal rate fell to about 17.29 per cent from about 20.14 per cent.

The 22.60 per cent FGN January 2035 bond remained the government’s largest funding instrument during the review period. Across four reopening auctions held between January and June 2026, the bond attracted subscriptions of about N2.30tn and accounted for approximately N1.52tn in allotments.

The 16.2499 per cent FGN April 2037 bond also recorded strong investor interest. Offered only in May and June, the 20-year instrument attracted subscriptions exceeding N1.24tn and total allotments of about N1.38tn, boosted by the N280bn non-competitive allocation recorded in May.

Among shorter-tenor instruments, the 19.89 per cent FGN May 2033 bond attracted N1.34tn in subscriptions and N541.34bn in allotments during its three reopening auctions in February and March 2026.

In contrast, the 2025 auction data showed that the 19.89 per cent FGN May 2033 bond accounted for the largest share of government borrowing during the first half of the year, raising N1.07tn, while the 18.50 per cent FGN February 2031 bond followed with N758.90bn.

The figures indicate that while the Federal Government significantly expanded domestic borrowing during the first half of 2026, investor demand remained robust despite the larger supply of securities.

The PUNCH earlier reported that foreign investors channelled $3.23bn into Nigerian bonds in the first quarter of 2026, highlighting a strong appetite for the country’s fixed-income securities amid elevated interest rates and improving confidence in the foreign exchange market

Data from the capital importation report released by the National Bureau of Statistics showed that bond investments accounted for 32.71 per cent of the $9.86bn portfolio investments recorded during the quarter and 31.10 per cent of the total $10.37bn capital imported into the country.

The bond inflow represented a 267.67 per cent increase from the $877.41m recorded in the corresponding period of 2025 and a 63.76 per cent rise from the $1.97bn attracted in the preceding quarter.

The sharp increase reflects the attractiveness of Nigerian sovereign debt instruments, which have offered among the highest yields in emerging and frontier markets following the Central Bank of Nigeria’s aggressive monetary-tightening cycle over the past two years.

Since assuming office in September 2023, CBN Governor Olayemi Cardoso has led the Monetary Policy Committee through one of the most aggressive tightening cycles in Nigeria’s history, raising the Monetary Policy Rate from 18.75 per cent to a peak of 27.50 per cent through a series of hikes in 2024 aimed at curbing inflation, stabilising the naira and restoring investor confidence.

After holding the benchmark rate at 27.50 per cent throughout most of 2025, the MPC began a cautious easing cycle in September 2025, cutting the MPR by 50 basis points to 27.00 per cent as inflation moderated for several consecutive months, before lowering it further to 26.50 per cent in early 2026.

At its most recent 305th meeting in May 2026, the MPC opted to retain the MPR at 26.50 per cent and leave all other key policy parameters unchanged, citing renewed inflationary pressures linked to global energy market disruptions while seeking to preserve the macroeconomic gains achieved through earlier tightening measures.

A renowned economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, recently warned that rising Federal Government borrowing from the domestic financial system is increasingly crowding out the private sector, as banks favour low-risk, high-yield government securities over lending to businesses.

“The increase in credit to the government can be attributed to a number of factors. The government has been raising money to finance the deficit. So this financing of the deficit has led to the issuance of bonds, treasury bills, and so on, which banks also buy. The rate is also very attractive, and it’s more attractive to them than lending to the real sector,” Yusuf said. He further urged the government to moderate its borrowing.

In a separate conversation, he also noted that while high yields on government securities had helped draw portfolio investors, they were also increasing the burden of public debt.

Yusuf told The PUNCH that the interest rates offered on government bonds and treasury instruments were excessively high and required coordination between fiscal and monetary authorities to moderate.

“It’s helping us to attract portfolio investment, but it’s creating a huge burden of debt service. We have to balance those two objectives. We have to improve portfolio flows, but it’s costing us a lot in terms of our domestic borrowing and debt-servicing costs,” he said.

The economist argued that Nigeria should reduce its reliance on debt-funded public projects by expanding public-private partnerships. According to him, governments should identify commercially viable infrastructure projects and offer them to private investors rather than financing them through additional borrowing.

Market analysts predict that any significant reversal in Federal Government bond yields is highly unlikely to occur before the final quarter of 2026, which means Nigerian fixed-income investors should brace for a prolonged period of high interest rates.

According to the latest macroeconomic analysis from Coronation Asset Management, a combination of sticky inflation, aggressive monetary policy, and heightened fiscal pressures will keep yields firmly elevated throughout the upcoming quarter.

The Niger Delta Power Holding Company has commenced the rehabilitation of the 225-megawatt Gbarain Power Plant in Bayelsa State, more than five years after a fire destroyed a critical component of the facility and stalled its planned commissioning.

The company formally handed over the rehabilitation project to a joint venture between TILT Energy Limited and Schneider Electric for the replacement of the plant’s burnt Power Control Module, a key component required for the operation of the gas-fired power station.

The development was disclosed in a statement issued on Friday by the Head of Corporate Communication and External Relations of NDPHC, Nazo Agim.

Speaking during the handover ceremony, the General Manager, Generation Projects, Ginsau Idris, said the replacement of the Power Control Module had become unavoidable because the original equipment was extensively damaged by fire.

He expressed optimism that the contractors would deliver the project successfully, noting that all stakeholders clearly understood their responsibilities and were committed to restoring the facility within the agreed timeline.

“The Power Control Module was extensively damaged by fire, making its replacement imperative, but we are confident in the contractors. All parties clearly understand their responsibilities and are committed to delivering the project successfully and within schedule.”

Also speaking, the Executive Director, Generation, Abdullahi Kassim, described the November 2020 fire as one of the biggest setbacks suffered by the project, recalling that the incident occurred only a few months before the plant was scheduled for commissioning.

He noted that despite the setback, the company remained committed to reviving the project because of its strategic importance to Nigeria’s electricity supply, with complementary infrastructure under construction to ensure the plant is fully ready for operation once the rehabilitation is completed.

“The PCM was destroyed by fire in November 2020, just months before the plant was due for commissioning,” he said, describing the incident as a major setback to the project. “Also, complementary infrastructure, including access roads and support buildings, is under construction,” he added, describing the Gbarain Power Plant as a strategic asset because of its proximity to the gas supply.

He further commended the Managing Director and Chief Executive Officer of NDPHC, Jennifer Adighije, for driving the revival of the project, saying her leadership had accelerated efforts to secure approvals and move the rehabilitation forward.

On behalf of the contractors, the Managing Director of TILT Energy Limited, Deji Awodeji, assured the NDPHC that the joint venture would deliver the project within the 12-month contract period and possibly ahead of schedule without compromising quality or safety standards.

In her remarks, the NDPHC Managing Director and Chief Executive Officer said the Gbarain Power Plant was identified as one of the quickest opportunities to increase electricity generation, prompting the company to prioritise its rehabilitation.

She said, “The project was prioritised after the Gbarain Power Plant was identified as a ‘low-hanging fruit’ capable of delivering a quick boost to electricity generation.”

She explained that NDPHC secured the necessary approvals and funding in record time and expressed confidence in the contractors’ capacity to execute the project successfully.

According to her, replacing the burnt PCM will pave the way for the recommissioning of the 225MW power plant, thereby strengthening electricity supply and supporting the Federal Government’s Renewed Hope Agenda.

The ceremony ended with the inspection of ongoing works at the project site by the NDPHC management team, contractors and other stakeholders.

The Gbarain Power Plant is one of the power generation projects developed under the National Integrated Power Projects programme, which was established to expand Nigeria’s electricity generation capacity and improve power supply across the country.

Located in Bayelsa State, the 225MW gas-fired plant is strategically situated close to the Gbarain-Ubie gas processing facilities, providing it with reliable access to natural gas.

Although the plant was substantially completed, its planned commissioning was delayed after a fire destroyed the Power Control Module in November 2020.

The rehabilitation is expected to restore the facility to operation and contribute additional generation capacity to the national grid at a time when Nigeria continues to grapple with inadequate electricity supply.