₦3.44 trillion bids flood Nigerian Treasury Bills market as government borrowing and tight monetary policy push rates higher
The Central Bank of Nigeria (CBN) recorded its strongest demand for Nigerian Treasury Bills (NTBills) in months on Wednesday, as investor appetite surged to ₦3.44 trillion at the Primary Market Auction (PMA), the highest level since December 2024.
At the auction, the apex bank offered Treasury Bills worth ₦1.15 trillion across three tenors: ₦150 billion for the 91-day bill, ₦200 billion for the 182-day bill, and ₦800 billion for the 364-day bill. Total subscriptions, however, significantly exceeded the offer, highlighting renewed interest in government debt instruments.
Despite the overwhelming demand, the CBN sold ₦1.06 trillion worth of bills across the three maturities, underscoring its cautious approach to liquidity management.
Investor interest was most pronounced in the 364-day instrument, where demand reached nearly four times the amount offered, reflecting preference for longer-dated securities with higher returns.
The last time the market witnessed comparable demand was on December 4, 2024, when total bids crossed ₦5 trillion amid elevated inflation and a high-interest-rate environment.
Yields at the auction were mixed. Rates on shorter-tenured bills moved higher, while the one-year bill saw a marginal decline but remained attractive. The 91-day bill rose to 16.50 per cent, while the 182-day bill climbed to 18.17 per cent from 17.99 per cent at the previous auction. The 364-day bill eased slightly to 22.49 per cent from 22.65 per cent but continued to deliver strong real returns.
Analysts attribute the sustained rise in yields to a combination of aggressive government borrowing and the Central Bank’s tight monetary stance. Nigeria’s 2026 fiscal year comes with a projected deficit of ₦23.85 trillion, compelling the Federal Government to rely heavily on domestic borrowing as international capital markets remain costly for emerging economies.
According to the 2026 first-quarter issuance calendar, the government plans to raise ₦7.55 trillion within the first three months of the year. This large volume of debt issuance has increased competition for investor liquidity, pushing yields upward.
Beyond funding government spending, the CBN is deliberately maintaining elevated interest rates to curb inflation and stabilise the naira. By keeping yields particularly the one-year bill above 22 per cent, the Bank aims to absorb excess liquidity and attract Foreign Portfolio Investment (FPI).
Higher yields on Nigerian debt instruments have made them increasingly attractive to offshore investors, helping to boost foreign exchange inflows and support the local currency.
The development comes as the Director-General of the World Trade Organisation, Dr Ngozi Okonjo-Iweala, called on Nigeria to deliberately court global investors and supply chain relocations to reduce import dependence, strengthen manufacturing, and create jobs. She spoke on Wednesday at Nigeria House during the World Economic Forum in Davos.
Also speaking at the forum, Minister of Foreign Affairs Yusuf Tuggar urged international investors to reassess their perception of Nigeria’s security situation, describing reported geopolitical risks as exaggerated.
Tuggar noted that insecurity incidents in the country were largely isolated and not reflective of conditions nationwide, adding that instability in the Sahel region had spilled into parts of Nigeria.
He stressed that Nigeria should be evaluated using the same risk standards applied to other countries, noting that regional conflicts should not overshadow investment opportunities in Africa’s largest economy.
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