FGN US Dollar Bond pays N140.29bn in interest between January and September 2025, while the stronger naira reduces reported principal by N55bn…..
Nigeria’s domestic US dollar bond obligations cost the government N140.29 billion in interest between January and September 2025, according to data from the Debt Management Office (DMO).
The FGN US Dollar Bond, part of the $2 billion Domestic FGN US Dollar Bond Programme launched in August 2024, required two interest payments during the nine-month period: N67.99 billion in March and N72.31 billion in September.
The interest paid on the dollar bond formed part of the N6.06 trillion total interest on domestic debt instruments over the period, while the overall domestic debt service including both principal and interest reached N6.32 trillion.
Breakdown of Domestic Interest Payments
- Federal Government Bonds: N4.17tn
- Nigerian Treasury Bills: N1.81tn
- FGN Sukuk: N70.72bn
- FGN Savings Bonds: N9.60bn
- Green Bond: N1.08bn
- Domestic US Dollar Bond: N140.29bn
Although the government spent heavily on interest, the naira value of the bond’s principal fell from N1.41tn as of December 31, 2024, to N1.35tn by September 30, 2025, a decline of about N55.48bn. This reduction reflects exchange rate movements, not repayment of the underlying dollar principal.
The bond of $917.41 million was initially converted at N1,535.32 per dollar in December 2024. By September 2025, the official rate had strengthened to N1,474.84 per dollar, mechanically lowering the reported naira value of the same obligation.
Rising Domestic Debt Stock
Despite the decline in the dollar bond principal, total domestic debt stock climbed from N70.41tn in December 2024 to N77.81tn by September 2025, an increase of N7.40tn.
- FGN Bonds rose from N55.44tn to N61.99tn (78–79% of total domestic debt)
- Nigerian Treasury Bills increased from N12.35tn to N12.68tn
Although the domestic dollar bond makes up a small portion of total debt, the N140.29bn interest payment highlights the cost implications of foreign-currency borrowing. Interest obligations remain tied to the dollar, meaning naira fluctuations can significantly affect debt service costs.
About the Domestic US Dollar Bond
The bond, part of a $2 billion domestic program, raised over $900 million from local investors and became the first of its kind issued domestically in foreign currency.
- Oversubscription: 180%
- Maturity: Five years
- Coupon rate: 9.75%
- Listing: Nigerian Exchange (NGX) and FMDQ Exchange
- Accolade: “West Africa Deal of the Year”
Finance Minister and Coordinating Minister of the Economy, Wale Edun, said the oversubscription reflects strong investor confidence in Nigeria’s economy. He added that the bond deepens domestic capital markets and provides an alternative to Eurobond issuance, while highlighting the exchange rate risk inherent in local dollar-denominated debt.
Edun noted that the successful issuance underscores the government’s efforts to diversify funding sources and promote economic growth and financial inclusion, even amid fiscal challenges.
This inaugural domestic FGN US Dollar Bond represents a milestone in Nigeria’s debt management strategy, offering both opportunities and risks tied to the country’s currency movements.
