Nigeria’s fixed income yields rose significantly last week on sell pressure across segments of the market, with total debt size jumping to N91.99 trillion, as investors demanded higher returns amid expectations of further monetary tightening by the Central Bank of Nigeria (CBN).
Data released by FMDQ Group Plc for the week ended November 7, 2025, showed that the total debt market size expanded to N91.99 trillion, up 3.59% week-on-week (WoW), suggesting a sharp rise in rates or cost of borrowing in both sovereign and corporate debt instruments.
The jump in interest rates, which lifted debt market size, contrasts sharply with the trend in previous weeks when yields were seen moderating across board, with valuation of the debt market crashing to about N87 trillion.
Analysts attribute the twist in sentiments to sell pressure, where new investors are demanding higher rates to compensate for short-term liquidity pressures. Exiting investors’ sell-offs were in anticipation of fresh auctions.
However, some analysts said the sell pressure was a strategic move to escape the Capital Gains Tax coming into effect by January 2026, amid geopolitical tension triggered by US President Donald Trump’s threat of military action against Nigeria has also triggered panic sales in the equities market last week, resulting to over N2 trillion losses in equities valuation.
In the Treasury Bills segment, the 5-Feb-2026 bill saw the most significant rise, with yields up 56 basis points to 16.23%, suggesting investors demanded higher returns for short-term instruments. The 7-May-2026 and 5-Nov-2026 bills also edged up marginally by 6bps and 2bps, respectively.
Yields on benchmark sovereign bonds were broadly stable, reflecting moderate demand in the secondary market. The 17-Apr-2029 bond inched up 10bps to 15.87 per cent, while the Mar-2036 and Apr-2049 papers held steady at 15.67 per cent and 15.57 per cent, respectively.
This mild increase in shorter-dated paper suggests investors are positioning ahead of expected inflation data and upcoming FGN bond reopenings.
Corporate debt instruments recorded mixed performance.
Meanwhile, short-term Commercial Paper yields for Dangote Sugar Refinery Plc and UAC of Nigeria Plc improved slightly to 23.96% and 22.86%, respectively, amid renewed corporate funding demand.
Bond futures prices strengthened across maturities. The 12M/17-SEP-2026 2Y FGN Bond Future gained to 107.58, while the 10Y FGN Bond Future (12M/17-SEP-2026) advanced to 132.08, reflecting mild bullish sentiment among investors expecting yields to moderate in coming months.
In the money market, overnight rates rose slightly as liquidity thinned. Open Repos were flat at 24.50%, while Overnight rates increased by 7bps to 24.79%, indicating tighter interbank liquidity.
With inflation still trending high and the CBN maintaining a restrictive monetary stance, analysts expect borrowing costs to remain elevated in the coming weeks. The rise in yields across Treasury bills, bonds, and corporate papers signals a tougher financing environment for issuers but could attract foreign and institutional investors seeking higher real returns.
However, market sentiment this week may likely hinge on the upcoming FGN bond auction scheduled for November 24, where pricing relative to Lagos State’s recent N200 billion bond issuance will be closely watched for risk premium differentials.