The Central Bank of Nigeria (CBN) has reported the strongest demand for its Nigerian Treasury Bills (NTBills) in recent months, with investors showing significant interest in the 364-day tenor. At the Primary Market Auction (PMA) on Wednesday, the CBN offered T-Bills worth N1.15 trillion across three maturities, but demand far exceeded supply, particularly for the 364-day bill, which saw demand four times the size of its offer.
The high demand for NTBills is attributed to a combination of factors, including aggressive government borrowing and the Central Bank’s tightening monetary stance. The 2026 fiscal year has begun with a projected deficit of N23.85 trillion, and the Federal Government is looking to the domestic market to fund a significant portion of this shortfall. As a result, yields have ticked higher, with the 91-day yield increasing to 16.50 per cent and the 182-day true yield climbing to 18.17 per cent.
The 364-day tenor saw a slight drop in true yield to 22.49 per cent, but remains an attractive option for investors. The CBN’s decision to allow rates to rise is aimed at combating persistent inflation and stabilizing the Naira. By keeping yields attractive, the bank hopes to mop up excess liquidity and attract Foreign Portfolio Investment (FPI), which would bring in much-needed foreign exchange to support the Naira.
The development comes as the Director-General of the World Trade Organisation, Dr Ngozi Okonjo-Iweala, advised the Nigerian government to target global investors and supply chain relocations to reduce import dependence and drive job creation. Meanwhile, the Minister of Foreign Affairs, Yusuf Tuggar, urged international investors to look beyond the security challenges facing Nigeria, stating that reported geopolitical risks were exaggerated.
Tuggar emphasized that incidents of insecurity in the country were isolated cases and not representative of the entire nation. He encouraged investors to treat Nigeria the same way they treat other countries, highlighting the importance of understanding the regional context of the conflict in the Sahel and its impact on Nigeria. As the country continues to navigate its economic challenges, the CBN’s efforts to attract investors and stabilize the economy will be crucial in determining the success of its fiscal policies.
