The Central Bank of Nigeria (CBN) has recorded a surge in investor appetite for Nigerian Treasury Bills (NT-Bills), with total subscriptions hitting ₦3.44 trillion at its latest Primary Market Auction (PMA), marking the strongest demand seen since December 2024.
At the auction held on Wednesday, the apex bank offered ₦1.15 trillion worth of Treasury Bills across three tenors—₦150 billion for the 91-day instrument, ₦200 billion for the 182-day bill, and ₦800 billion for the 364-day maturity. Investor demand, however, significantly exceeded supply, particularly for the one-year instrument.
Market data showed that the 364-day bill attracted demand nearly four times the amount offered, underscoring strong investor preference for longer-dated securities with higher yields. Despite the heavy subscription, the CBN sold a total of ₦1.06 trillion across the three maturities, leaving a substantial portion of bids unmet.
The last comparable level of demand was recorded on December 4, 2024, when subscriptions crossed ₦5 trillion during a period marked by elevated inflation and high interest rates.
Yields at the auction reflected mixed movements. Rates on short-term instruments increased, while yields on the 364-day bill eased slightly but remained elevated. The 91-day Treasury Bill cleared at 16.50 per cent, while the 182-day bill rose to a true yield of 18.17 per cent, up from 17.99 per cent at the previous auction. In contrast, the 364-day bill saw its true yield decline marginally to 22.49 per cent from 22.65 per cent, though it continues to offer strong returns.
Analysts attribute the heightened demand and elevated yields to a combination of increased government borrowing and the CBN’s tight monetary policy stance. With the 2026 fiscal year projected to record a budget deficit of ₦23.85 trillion, the Federal Government is expected to rely heavily on domestic borrowing, as access to international capital markets remains costly for emerging economies.
The government’s borrowing plan for the first quarter of 2026 alone stands at ₦7.55 trillion, according to the issuance calendar. Market watchers note that the anticipated volume of debt instruments has intensified competition for investor funds, naturally driving yields higher.
Beyond fiscal pressures, the CBN is also using elevated interest rates as a tool to curb inflation and stabilise the naira. By maintaining attractive yields—particularly keeping the one-year Treasury Bill above the 22 per cent mark—the apex bank aims to absorb excess liquidity in the financial system and draw in foreign portfolio investments.
Higher yields on Nigerian debt instruments improve their appeal to offshore investors, potentially boosting foreign exchange inflows and supporting the local currency.
The renewed interest in Nigerian financial assets comes amid broader efforts by government officials to improve the country’s investment image globally. At the ongoing World Economic Forum in Davos, the Director-General of the World Trade Organisation, Dr Ngozi Okonjo-Iweala, urged Nigeria to actively pursue global investors and supply chain relocations to cut import dependence, expand manufacturing, and create jobs.
Similarly, Nigeria’s Minister of Foreign Affairs, Yusuf Tuggar, used the Davos platform to encourage investors to reassess perceptions of risk in the country. He argued that security challenges are often overstated and largely limited to specific areas, rather than reflecting conditions nationwide.
According to Tuggar, some of Nigeria’s security issues are linked to wider regional instability in the Sahel, stressing that isolated incidents should not overshadow the country’s economic reforms and investment opportunities.
Together, strong domestic demand for government securities and renewed diplomatic efforts to attract foreign capital signal Nigeria’s push to stabilise its economy and reposition itself as a competitive destination for both local and international investors.
