Nigeria paid N140.29bn as interest on its domestic US dollar bond between January and September 2025, figures obtained from the Debt Management Office have shown.

Data from the DMO’s Actual Domestic Debt Service report indicated that the Federal Government made two interest payments on the FGN US Dollar Bond during the period. It paid N67.99bn in March and N72.31bn in September, bringing the cumulative interest on the instrument to N140.29bn in nine months.

The amount formed part of the N6.06tn total interest paid on domestic debt instruments between January and September 2025. Overall domestic debt service, comprising interest and principal repayments, stood at N6.32tn within the period under review.

A breakdown of the interest component showed that Federal Government Bonds accounted for N4.17tn, while Nigerian Treasury Bills gulped N1.81tn. FGN Sukuk attracted N70.72bn, FGN Savings Bonds recorded N9.60bn, and the Green Bond accounted for N1.08bn in interest payments.

Despite the N140.29bn interest outlay, the outstanding principal of the domestic dollar bond declined over the nine-month period. The DMO’s domestic debt stock report showed that Domestic FGN US Dollar Bonds stood at N1.41tn as of December 31, 2024.

By September 30, 2025, the figure had dropped to N1.35tn, representing a decline of about N55.48bn. The PUNCH observed that the reduction was driven by exchange rate movements rather than any repayment of the underlying dollar principal.

The DMO disclosed that the FGN US Dollar Bond of $917.41m issued in September 2024 was converted to naira at the Central Bank of Nigeria’s official exchange rate of N1,535.32 to $1 as of December 31, 2024. As of September 30, 2025, the outstanding amount was converted at a stronger official rate of N1,474.84 to $1.

The appreciation of the naira between the two reporting dates reduced the naira value of the same dollar-denominated obligation. In practical terms, while the dollar liability remained broadly unchanged, the application of a lower exchange rate in September 2025 compared to December 2024 mechanically reduced the reported naira value of the bond by about N55.48bn.

Meanwhile, total domestic debt stock rose from N70.41tn as of December 31, 2024, to N77.81tn as of September 30, 2025, indicating an increase of N7.40tn within nine months. FGN Bonds accounted for N55.44tn of the domestic debt stock at the end of 2024, representing 78.73 per cent of the total.

By September 2025, FGN Bonds had increased to N61.99tn, accounting for 79.67 per cent of the domestic debt stock. Nigerian Treasury Bills rose from N12.35tn in December 2024 to N12.68tn by September 2025.

Although the domestic dollar bond represents a relatively small share of the overall debt stock, the N140.29bn paid in interest over nine months highlights the cost implications of foreign-currency borrowing. The instrument accounted for about 2.31 per cent of the N6.06tn total interest paid on domestic debt within the review period.

The figures illustrate how exchange rate dynamics can materially affect reported debt levels. A stronger naira reduces the local currency value of dollar obligations, but interest payments remain tied to the foreign currency exposure, reinforcing concerns about debt service pressures as government revenue continues to face competing demands.

The dollar bond, introduced in August 2024 under the $2bn Domestic FGN US Dollar Bond Programme, raised over $900m from local investors and was the first of its kind to be issued domestically in foreign currency.

The debut issuance was 180 per cent oversubscribed and has since been listed on the Nigerian Exchange and the FMDQ Exchange. It was later recognised as the “West Africa Deal of the Year.”


While the bond has been praised for deepening Nigeria’s capital markets and providing an alternative to Eurobond issuance, it introduces considerable exchange rate risk. Although raised locally, the bond is dollar-denominated and therefore imposes a heavier repayment burden in naira terms whenever the local currency depreciates.

While discussing the results of the bond issuance, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, noted that the oversubscription reflects investor confidence in Nigeria’s economic stability and potential for growth.

Edun explained that the successful issuance of the domestic dollar bond marks a significant step in the government’s efforts to deepen economic growth and promote financial inclusion. He added that this achievement demonstrates the government’s commitment to diversifying funding sources amid economic challenges.

“The issuance of this inaugural domestic FGN US Dollar Bond highlights the continued faith investors have in Nigeria’s economy,” Edun said.

The $500m domestic FGN US Dollar Bond, with a five-year maturity and a 9.75 per cent coupon, is the first tranche of a $2bn bond programme registered with the Securities and Exchange Commission.