Nigeria’s total debt surged to N91.99 trillion last week as investors sold off bonds and Treasury bills in anticipation of higher interest rates. Data from FMDQ Group Plc for the week ending November 7, 2025, shows a 3.59% week-on-week increase from N88.8 trillion, reflecting rising borrowing costs across both sovereign and corporate instruments. Analysts say this marks a reversal from recent weeks when yields had moderated, signaling growing market caution.
The sell-off comes as traders seek better returns to offset rising inflation and short-term liquidity constraints. “New investors are demanding better compensation for risk, while some existing players are exiting ahead of fresh auctions,” one market analyst noted. The situation has been further influenced by investors strategically reducing exposure ahead of the Capital Gains Tax, set to take effect in January 2026.
Geopolitical tensions have also fueled market jitters. Threats of military action against Nigeria from U.S. President Donald Trump sparked panic sales in equities, wiping off over N2 trillion from market valuation. Meanwhile, Treasury Bill yields climbed sharply, with the 5-Feb-2026 bill rising 56 basis points to 16.23%, highlighting strong demand for short-term returns. Other benchmark bonds showed moderate movement, with some like the 17-Apr-2029 sovereign bond rising 10bps to 15.87%, indicating cautious investor positioning ahead of inflation reports and bond reopenings.
Corporate debt performance was mixed. Yields on Dangote Industries Funding Plc (2032) rose 11bps to 17.69%, while Axxela Funding 1 (May 2027) inched up 3bps to 20.35%. NSP-SPV PowerCorp’s February 2034 bond gained 22bps to 17.02%, and short-term commercial papers from Dangote Sugar Refinery Plc and UAC of Nigeria Plc rose to 23.96% and 22.86%, reflecting renewed demand for corporate funding. Bond futures also showed modest gains, signaling cautious optimism among investors expecting yields to ease later.
The money market remains tight, with overnight rates ticking up slightly and Open Repos stable at 24.50%. Analysts warn that with inflation still elevated and the CBN holding a hawkish stance, borrowing costs are likely to stay high. Market focus now shifts to the upcoming FGN bond auction on November 24, where investors will compare yields with Lagos State’s recent N200 billion bond issuance to gauge risk premiums and investment opportunities.
source: The Sun