FG Spends N611.7bn Servicing Dollar-Denominated Bond in March – DMO

The Federal Government of Nigeria spent N611.71 billion in March 2025 to service its first-ever domestic US Dollar-denominated bond, according to the latest figures released by the Debt Management Office (DMO).

The bond, introduced in August 2024 as part of a $2 billion Domestic US Dollar Bond Programme, raised over $900 million from Nigerian-based investors and was oversubscribed by 180%. The DMO’s Q1 2025 debt servicing report indicated that an interest payment of $44.97 million—converted at an exchange rate of N1,511.80/$—was due on March 6. This interest payment, combined with principal redemption, brought the total March payment to N611.71 billion.

The March servicing accounted for 23.4% of the N2.61 trillion total domestic debt service recorded in Q1 2025. It also represented 47% of the N1.3 trillion spent on domestic debt obligations in the month of March alone, making it the largest single repayment item during the period.

Though the bond has been praised for deepening Nigeria’s local capital markets and offering a local alternative to Eurobond issuance, analysts have raised concerns over its exposure to currency risk. The bond, though locally raised, is dollar-denominated, which means repayment costs in naira terms balloon when the local currency depreciates—as is the case with the naira trading above N1,500 to the dollar.

As of September 2024, the bond added N1.47 trillion to Nigeria’s domestic debt stock. By March 2025, the figure dropped to N1.41 trillion, making up 1.88% of Nigeria’s revised domestic debt portfolio of N74.89 trillion.

Finance and Economy Minister Wale Edun hailed the successful issuance as a strong vote of confidence in Nigeria’s economic prospects. He noted that the oversubscription reflects the trust local investors have in government reforms aimed at stabilizing the economy and diversifying funding sources.

The five-year bond carries a coupon of 9.75% and represents the first tranche of the larger $2 billion bond programme approved by the Securities and Exchange Commission (SEC).