FG spends N611.71 billion to service first home greenback bond in March 

The Federal Authorities spent N611.71 billion in March 2025 servicing its first-ever US dollar-denominated bond issued throughout the home market, making it the one largest home debt service merchandise for the month and highlighting the rising value of FX-linked obligations in Nigeria’s debt profile.

This was disclosed within the Debt Administration Workplace (DMO)’s newest report on precise home debt service for Q1 2025.

The report reveals that the March fee accounted for 47.05% of the full N1.3 trillion spent on home debt servicing that month and 23.44% of the N2.61 trillion complete spent in the whole first quarter.

The greenback bond, launched in August 2024 beneath the $2 billion Home FGN USD Bond Programme, raised over $900 million from native buyers, turning into the primary of its type to be issued in international forex inside Nigeria.

It was 180% oversubscribed and later listed on each the Nigerian Trade (NGX) and FMDQ Trade. The deal was additionally awarded the “West Africa Deal of the 12 months.” 

In line with the DMO, the curiosity fee of $44.97 million was due on March 6 and was transformed at an official alternate fee of N1,511.80/$, which quantities to roughly N67.99 billion. Nevertheless, the DMO reported a complete of N611.71 billion as debt service value for the bond in March.

The discrepancy means that the federal government might have redeemed a part of the bond’s principal—estimated at N543.72 billion—alongside the curiosity fee, bringing the full to N611.71 billion. If confirmed, this may mark a big principal reimbursement solely seven months after the bond’s issuance.

What you must know 

As of September 30, 2024, the bond added N1.47 trillion to the home debt inventory of N69.22 trillion, accounting for two.12% of the full. By March 31, 2025, the excellent quantity had declined to N1.41 trillion, representing 1.88% of the revised complete home debt of N74.89 trillion.

• Whereas the bond has been praised for deepening Nigeria’s capital markets and offering a substitute for Eurobond issuance, it introduces appreciable alternate fee threat.

Though raised domestically, the bond is dollar-denominated and subsequently imposes a heavier reimbursement burden in naira phrases each time the native forex depreciates.

• With the naira buying and selling above N1,500/$, such devices inflate the federal government’s debt servicing prices, even within the absence of latest exterior borrowing.
• The greenback bond servicing alone eclipsed a lot of the curiosity funds made on all different home devices in March 2025.

The home greenback bond was created to supply a protected and tax-free funding avenue to dollar-holding entities in Nigeria whereas serving to the Federal Authorities increase international alternate with out tapping unstable worldwide markets.

• Nevertheless, the March 2025 reimbursement determine highlights the monetary weight of servicing such debt beneath an unstable forex regime.

The outsized value of servicing this single instrument has renewed concentrate on Nigeria’s rising publicity to FX-denominated liabilities, particularly these tied to unstable alternate charges. Though issued domestically, the greenback bond provides stress to Nigeria’s fiscal stability, given the weakening of the naira and rising exterior debt service obligations.