An expansion in tax revenue has led to less aggressiveness in Nigeria debt issuance by the government as President Bola Tinubu’s bold reforms have underpinned investors’ positive outlook for the country’s bond.
Gross bond issuances were down 55 percent to N3.18 trillion between January and August 2025, from N7.09 trillion from January to August 2024, according to data gathered by Chapel Hill Denham Limited.
The research house in a recent report stated that there is a plan to reduce reliance on Eurobond issuance to increase bilateral and multilateral borrowings, which are cheaper sources of financing.
“We expect fiscal revenue to be underpinned by the tax reforms laws that take effect from 2026, leading to less aggressiveness by the government on borrowings,” said analysts at Chapel Hill Denham.
“We highlight that the reduced aggressiveness is reflected in the January – August 2025 gross bond issue that is 55% lower than the corresponding period of 2024,” said analysts at Chapel Hill Denham.
In the last one year, the country’s total debts (both domestic and foreign) has been growing slowly, but perhaps more worrisome is that it is huge in relation to economic output.
Of course, the devaluation of the currency, additional borrowing to finance the budget deficit, and the securitisation of the central bank’s N7.3 trillion ways and means in the first six months of 2024 worsened the debt to GDP ratio.
Nigeria’s debt to GDP ratio printed at 52.25% as at 2024 from 40.57% as at 2023), exceeding the nominal debt-to-GDP ratio limit of 40%, according to data from Chapel Hill Denham.
Relative stability in the foreign exchange market and tax reforms intended to magnify government revenue are needed to tame rising debt and debt to GDP ratio.
There has been an increase in non-oil revenue, as the President discloses that Nigeria achieves the non-oil revenue target for 2025 in August.
The president has signed the 2025 tax reform bills into law as the new regime takes effect from January 2026.
Analysts say it is important for the policy makers to strengthen the revenue stream so as to reduce borrowings that leads to spiraling interest payment which eats deep into revenue.
Nigeria’s total debt stock (both domestic and foreign obligations) stood at N149 trillion, 2.73 percent higher than 2024’ N149 trillion, according to data from Chapel Hill Denham.
Further analysis shows total debts surged by 110.86 percent to N97 trillion in 2023 from N46 trillion the previous year. That represents the largest expansion in financial obligations.
Yields in the fixed income market have been largely driven by an aggressive monetary policy in the face of inflationary pressures.
The yield on Nigeria 10-year bond yield rose to 16.63% on September 9, 2025, marking a 0 percentage point increase from the previous session.
Over the past month, the yield has edged up by 0.96 points, though it remains 2.86 points lower than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity.
