The Central Bank of Nigeria (CBN) saw strong demand for for the Nigerian Treasury Bills (NTBills) of N3.44 trillion at the primary auction on Wednesday, far exceeding its offer and the highest since December 2024, as investors locked in on high returns.
At the Primary Market Auction (PMA) on Wednesday, the CBN put up 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. Investors showed the largest interest in the 364-day bill, with demand four times the size of its offer. However, the CBN only sold N1.06 trillion worth among all three maturities. The last time demands were this strong was on December 4, 2024, when investors’ demands crossed N5 trillion during peak inflationary and high-interest environment.
Read also: T-bills, bonds offer final yield play as rate cuts loom
This is why the Nigerian Treasury Bill market has seen an increased level of participation amongst players, evident in subscription levels trending above N1 trillion at primary auctions since December 2025.
Analysts at Meristem attribute the increased participation to investors aiming to leverage rising rates.
Yields ticked higher on the short-tenured bills, while the 364-day softened slightly but continues to deliver high returns.
The 91-day yield ticked upward to 16.50 percent, while the 182-day true yield climbed to 18.17 percent from 17.99 percent at the last auction.
While the 364-day saw a drop in true yield to 22.49 percent from 22.65 percent at the last auction.
The primary catalyst for the current surge in yields is a combination of aggressive government borrowing and the Central Bank’s tightening monetary stance.
Read also: OMO market yields outpace T-bills on limited participation
The 2026 fiscal year has arrived with a projected deficit of N23.85 trillion. With international capital markets remaining expensive for emerging economies, the Federal Government is looking inward to the domestic market to fund the lion’s share of this shortfall.
The Q1 2026 issuance calendar reflects this, with an intended borrowing of N7.55 trillion in the first three months alone. This huge supply of paper naturally pushes yields higher as the government competes for investor liquidity.
Beyond the government’s need for cash, the Central Bank is intentionally allowing rates to rise to combat persistent inflation and stabilize the Naira. By keeping yields attractive, specifically the one-year true yield above 22 percent, the CBN aims to Mop up excess liquidity and attract Foreign Portfolio Investment (FPI). High yields make Nigerian debt attractive to offshore investors, bringing in the foreign exchange needed to support the Naira.
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 one-year NTB.
“ Overall, we advise fund managers to play at the short to mid segment of the curve, especially in H1’26,” he said.
Matilda Adefalujo, fixed income analyst at Meristem Securities, said that they expect the government to keep rates relatively attractive in order to sustain investor participation.
Read also: Here’s what rising T-Bills yields mean for investors
Ayodeji Ebo, managing director Optimus by Afrinvest said while the 364-day softened slightly, it continues to deliver the best yield for investors looking to lock in high returns.
“ Longer-dated bills still offer the most compelling value in the current rate environment,” he said.
The hike in yields will spill over to the secondary market where retail investors can participate via their banks or mobile apps such as Risevest, Cowrywise, and Bamboo, Meritrade, I-invest among others.