The Central Bank of Nigeria (CBN) has unveiled the Nigerian Overnight Financing Rate (NOFR), a new benchmark interest rate designed to enhance transparency, improve price discovery, and strengthen monetary policy transmission within the country’s financial markets. In a statement released on Friday by CBN spokesperson Hakama Sidi Ali, the apex bank emphasized that the NOFR would facilitate consistent pricing of money market instruments and promote greater efficiency in Nigeria’s financial system.
This initiative positions Nigeria alongside leading global economies that utilize benchmark rates, including the Secured Overnight Financing Rate (SOFR) in the United States, the Sterling Overnight Index Average (SONIA) in the United Kingdom, the Euro Short-Term Rate (€STR) in the Eurozone, and the Tokyo Overnight Average Rate (TONA) in Japan. The NOFR was formally adopted during a stakeholder engagement session held on February 27, 2026, and has since received regulatory approval, making it operational. The CBN will act as the benchmark administrator to ensure governance, transparency, and regular publication of the rate.
The introduction of the NOFR also aligns Nigeria with regional counterparts such as South Africa, which employs the Johannesburg Interbank Agreed Rate (JIBAR). The CBN stated that the new benchmark would help attract greater international participation in Nigeria’s financial markets while supporting domestic economic stability. This development is part of the CBN’s broader efforts to modernize Nigeria’s financial infrastructure and enhance the effectiveness of its monetary policy tools.
By adopting a globally recognized benchmark, the central bank aims to reduce reliance on outdated reference rates and mitigate risks associated with market volatility. Market analysts have welcomed the initiative, highlighting that a standardized benchmark could boost investor confidence and facilitate more efficient capital allocation. The CBN has committed to providing ongoing oversight and regular updates on the NOFR to ensure its credibility and relevance in Nigeria’s evolving financial landscape.
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