The Central Bank of Nigeria (CBN) has introduced the Nigerian Overnight Financing Rate (NOFR), a new benchmark aimed at enhancing transparency and efficiency in the country’s money market. Developed in collaboration with the Financial Markets Dealers Association (FMDA), the NOFR will serve as a standardized reference for overnight funding. This initiative is intended to strengthen monetary policy transmission and deepen Nigeria’s financial system.
In a statement signed by the Acting Director of Corporate Communications, Hakama Sidi Ali, the CBN emphasized that this initiative aligns Nigeria with global best practices in short-term interest rate frameworks. The introduction of the NOFR is expected to improve price discovery, ensure consistent pricing of money market instruments, promote financial innovation, boost investor confidence, and enhance risk management throughout the financial system. By establishing this benchmark, Nigeria positions itself alongside leading global rates such as the Secured Overnight Financing Rate (SOFR), Sterling Overnight Index Average (SONIA), Euro Short-Term Rate (€STR), and Tokyo Overnight Average Rate (TONA). Additionally, the NOFR complements Africa’s Johannesburg Interbank Average Rate (JIBAR), further reinforcing Nigeria’s integration into global financial markets.
The development of the NOFR followed a stakeholder engagement session held on February 27, 2026, during which market participants formally adopted the rate. Following this, regulatory approval was secured, paving the way for its implementation. The introduction of the NOFR is part of broader efforts to modernize Nigeria’s financial infrastructure, improve liquidity management, and attract greater participation from both domestic and international investors. By providing a credible and transparent benchmark, the CBN aims to foster a more resilient and efficient money market that can better support economic growth.
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