The Debt Management Office (DMO) has reported that the Federal Government spend N611.71 billion to service its first-ever US dollar-denominated bond issued in the domestic debt instrument market in March this year.
The Office, in its just published report on actual domestic debt service for Q1 2025, indicated that the amount represented the single largest domestic debt service item for the month and showed the rising cost of FX-linked obligations in Nigeria’s debt profile.
The report showed that the month under review, payments accounted for 47.05% of the total N1.3 trillion spent on domestic debt servicing and 23.44% of the N2.61 trillion total spent in the quarter.
The USD-denominated debt instrument, which was introduced in August 2024 under the $2 billion Domestic FGN USD Bond Programme and the first of its kind to be issued in foreign currency in the investment market, raised over $900 million from local investors.
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According to the DMO, the bond which was won the “West Africa Deal of the Year” award, was 180% oversubscribed and later listed on both the Nigerian Exchange (NGX) and FMDQ Exchange.
The Office reported that the interest payment of $44.97 million was due on March 6 and was converted at an official exchange rate of N1,511.80/$1, which amounted to approximately N67.99 billion.
However, the DMO reported a total of N611.71 billion as debt service cost for the bond in the month under review, suggesting that the Federal Government may have redeemed part of the bond’s principal estimated at N543.72 billion with the interest payment, bringing the total to N611.71 billion.
Available data from the Office, as of September 30, 2024, the bond added N1.47 trillion to the domestic debt stock totalling N69.22 trillion, accounting for 2.12% of the total debt.
However, the DMO’s latest report showed that by March 31, 2025, the outstanding amount had declined to N1.41 trillion or 1.88% of the revised total domestic debt stock of N74.89 trillion.
