In Q1 2025, investors subscribed to N2.83 trillion in Federal Government bonds, down from N3.12 trillion in Q1 2024, as the government reduced bond offers to moderate borrowing amid high interest rates. The total amount allotted stood at N1.94 trillion, a 23% decline from N2.52 trillion in the same period last year.
The government offered N1.10 trillion in bonds, significantly lower than Q1 2024’s N3.31 trillion, reflecting a shift towards issuing fewer instruments while deepening liquidity in existing bonds. Despite this reduction, investor demand remained strong, especially for medium- to long-term bonds.
In January 2025, N450 billion was offered, attracting N669.94 billion in bids, with N601.04 billion allotted. February saw a further drop to N350 billion, yet demand surged to N1.63 trillion, leading to an allotment of N910.39 billion. By March, N300 billion was offered, with subscriptions reaching N530.31 billion and allotments totaling N423.68 billion.
High interest rates shaped market dynamics, with January’s marginal rates ranging from 21.79% to 22.60%, significantly above January 2024’s 15.00%-16.50% range. By March, rates eased slightly to 19.00%-19.99%, suggesting potential stabilization.
The Federal Government’s restrained borrowing strategy aligns with debt sustainability concerns. Institutional investors, particularly pension funds, showed strong interest in longer-term bonds, reinforcing market stability while supporting price discovery in the secondary market.
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