The Federal Government has borrowed a total of N2.769 trillion from the domestic bond market between January and August 2025, further underlining its reliance on debt to finance its operations.
Data from the Nigerian Exchange Limited (NGX) show that government bond listings dominated new issuances within the period, accounting for 86.5 per cent of total market activity valued at N3.201 trillion.
By contrast, corporate listings were significantly lower, with Dangote Cement Plc raising N38.2 billion and TSL SPV Plc listing N5 billion, bringing total corporate bond issuance to just N43.2 billion.
Analysts say the huge gap highlights how businesses remain hesitant to tap the capital market for long-term financing, while government continues to crowd out the private sector.
Market experts attributed the strong uptake of government bonds to attractive yields and investor confidence in the Federal Government’s ability to service its debt obligations.
Pension Fund Administrations (PFAs) and institutional investors have remained the biggest buyers, preferring the relative safety of FGN bonds over more volatile investment instruments.
The government, under President Bola Tinubu, has repeatedly defended its borrowing strategy, insisting that funds raised are being channelled into infrastructure development and other growth-driven projects.
The administration has set a target of growing Nigeria’s economy to $1 trillion by 2030, with a pledge to quadruple GDP within the next five years through economic reforms and private-sector partnerships.
At the recent Capital Market Committee (CMC) meeting, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, represented by his state counterpart, Dr. Doris Uzoka-Anite, said the market had witnessed major transformation since 2015, including stronger regulation and broader participation.
He stressed that the ongoing implementation of the Capital Market Master Plan (2015–2025) has helped in boosting competitiveness and deepening market structures.
According to him, the revised plan now prioritises digitalisation, sustainability, capital formation, and innovation to align with Nigeria’s wider economic agenda.
Stockbrokers and financial analysts, however, urged the government to introduce bold reforms to make the capital market a real driver of industrialisation.
The Chartered Institute of Stockbrokers (CIS) warned that foreign direct investment inflows remain weak due to exchange rate instability, policy inconsistencies, and infrastructure deficits.
They further recommended a national savings strategy to mobilise domestic resources, tax incentives to encourage multinational companies to list on the NGX, and public-private partnerships (PPPs) to accelerate infrastructure delivery.
Despite the strong subscription to FGN bonds, concerns are mounting over Nigeria’s rising debt profile. The country’s total public debt stood at N121.67 trillion ($91.46 billion) as of March 2025, according to the Debt Management Office (DMO), raising fears about long-term sustainability.
Vice President of Highcap Securities Limited, David Adonri, cautioned that over-reliance on debt financing without corresponding growth in revenue could spell danger for the economy.
“The government’s borrowing spree is crowding out the private sector, while weak investor confidence in the primary market has continued to stifle new company listings. If this trend persists, the debt may become unsustainable,” he warned.
Adonri further called on the government to compel oil majors and multinational companies contributing significantly to GDP to list on the exchange, with tax holidays and contract incentives as encouragement.
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