Analysts project a mild uptick in the yields of the one-year treasury bill (T-Bills) at the primary auction on Wednesday, where N1.15 trillion worth of bills will be put up for sale by the Central Bank of Nigeria (CBN).
“We expect stop rates to hover around current levels, with a mild upward bias at the long end of the curve. Given the frontloading of government borrowings,” said Matilda Adefalujo, fixed income analyst at Meristem Stockbrokers.
The CBN conducts its second Treasury Bills Primary Market Auction (PMA) for the year and the month on Wednesday, with a total offer of N1.15 trillion across the three maturities. N150 billion worth for the 91-day, N200 billion for the 182-day, and N800 billion for the 364-day tenors.
The 2026 fiscal year has come with a N23.85 trillion deficit, and the Federal Government is looking to the domestic market to fund the lion’s share of it.
The released calendar for Nigeria Treasury bill auction for the first quarter of 2026 shows that the government will have most of its borrowing this period. The issuance calendar shows an intended borrowing of N7.55 trillion proposed for the first three months of the year.
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What does this mean for investors?
For this reason analyst forecast a spike in yields during the first quarter. Olaolu Boboye, lead economist at CardinalStone, said in their report that they see 18.0 percent to 20.0 percent yield on 1-year NTB.
“ Overall, we advise fund managers to play at the short to mid segment of the curve, especially in H1’26,” he said.
In addition, maturing bills for the week’s worth of N725.19 billion are significantly lower than the auction offer size of N1.15 trillion, which further buttresses the government’s funding needs.
Adefalujo said that they expect the government to keep rates relatively attractive in order to sustain investor participation.
Read also: T-bills, bonds offer final yield play as rate cuts loom
“ In addition, the levels at which one-year bills are currently trading in the secondary market at 17.50 percent should prompt investors to demand higher rates as tomorrow’s auction,” she said.
Demand was very strong at the latest auction, with investors offering a total of N1.54 trillion. Most of the interest went to the 364-day bill, which attracted N1.38 trillion (the vast majority of the total).
The 91-day and 182-day bills saw much lower interest, bringing in only N112.36 billion and N49.91 billion, respectively. Interest rates (stop rates) went up across the board compared to the last auction of 2025.
The Nigerian Treasury Bill market has seen an increased level of participation amongst players, evinced in subscription levels trending above N1 trillion at primary auctions since December 2025.
Analysts attribute the increased participation to investors aiming to leverage rising rates.