Business
Nigerian Investors Eye FG Bonds … Bauchi Floats N40bn Bond
With Nigeria over-the-counter (OTC), bond market has continued to dominate the country’s capital market as investors have shifted their interest away from listed equities to the federal government bonds.
The increasing attraction to bonds recently saw both corporate and individual investors picking 250.8 million units worth N257.4 billion in 1,396 deals.
In the preceding week 233.6 million units valued at N236.4 billion was traded in 1,258 deals. An analysis of the activities in the bond sector of the Nigerian Stock Exchange (NSE), showed that the 5th Federal Government of Nigeria (FGN) Bond 2013 series one was the most active with 34.93 million units valued at N34.7 billions in172 deal.
The 4th FGN bond 2010 series followed with 17.5 million units valued at N17.9 billion in 106 deals. In all, 27 of the 42 quoted FGN bonds were traded during the last week June compared with 28 bonds sold in the preceding.
In the equities sector, however, investors, scramble for profit from the recent rally of listed equities at the Exchange has continued to depress returns from pricing.
But even as investors are angling for federal bonds, the Bauchi State Government has concluded plans to float a N40 billion bond to raise funds from the capital market to augment its dwindling revenues.
The state Commissioner for Finance, Aminu Hammayo cited persistent decrease in the revenues accruing to the state from the Federation Account as the reason for the bond.
Giving details of the plan,
Hammayo said the money which is intended to be used to provide basic infrastructure for the socio-economic development of the state, would be raised over a period of 15 years and that it would be raised in trenches with N20 billion to be raised in the first trench.
“The purpose is to finance projects in the areas of education, health, rural development and the proposed Independent Power Project (IPP), he said.
Hammayo said government decided against sourcing for funds from the money market because of its limited opportunities, adding that “capital market provides longer term funds to be paid within a period of between 10 and 15 years. It also provides unhindered opportunities for debt management and other contractual obligations.”
Credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, signifying a positive balance of N2.22 trillion month-on-month.
Year-on-year, the figure represents a nine per cent increase compared with the N76.13 trillion recorded in June 2025. The latest figures come as the CBN continues to balance efforts to control inflation with the need to support economic growth and expand credit to businesses.
The CBN data shows that credit to Nigeria’s private sector increased by approximately 2.74 per cent month-on-month between May and June 2026. Also, the CBN data noted that credit to the government fell slightly to N40.03 trillion from N40.38 trillion. Other assets, net, dropped to N10.76 trillion from N12.63 trillion.
The credit surge signifies sustained growth in lending to businesses and other private-sector borrowers during the month. The rise in private sector credit was recorded alongside an increase in net domestic credit, despite declines in credit to government and other assets.
Further analysis of the report says that compared with June 2025, private sector credit rose by about N7.13 trillion yea-on-year but net domestic credit increased by approximately N1.87 trillion during the month.
The CBN’s relatively tight monetary policy stance notwithstanding, more banks still loaded funds to the private sector within the period. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 306th meeting on July 20 and 21.
The Committee reviewed recent developments in the global and domestic economies, assessed emerging risks to the outlook and considered their implications for monetary policy and retained all rates.
The Committee decided to retain the Monetary Policy Rate at 26.5 per cent; the Standing Facilities Corridor around the MPR at +50/-450 basis points and retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.
The MPC decision means that credit extension in the private sector will likely continue to rise because of rising confidence in the sector and calls by stakeholders for banks to invest in the private scetor instead of government securities.
