Nigeria Money Market Shift: T-Bills Hit N3.2tr as Commercial Paper Market Slumps 58% in March 2026

Nigeria’s money market experienced a sharp shift in March 2026 as investors increasingly turned to government-backed securities. Treasury bills (T-bills) issued by the Debt Management Office (DMO) rose to N3.2 trillion, marking a 10.37% increase from February’s N2.8 trillion, while confidence in risk-free assets continued to strengthen.

At the same time, the commercial paper (CP) market recorded a steep decline, falling by 58.45% to N34 billion from N82.18 billion in the previous month. The drop reflects weakening corporate appetite for short-term funding as borrowing conditions tightened and investors leaned toward safer instruments.

Market operators attribute the growing preference for treasury bills to attractive yields, strong liquidity management by authorities, and sustained demand from institutional investors such as banks and asset managers. These factors have reinforced T-bills as a preferred tool for both investment and government short-term financing needs.

In contrast, the CP market struggled with reduced issuance activity, with only 10 CP deals recorded in March. Analysts link this slowdown to earlier funding raised in February, higher borrowing costs, and competition from government securities, which continue to offer better risk-adjusted returns in the current economic climate.

Commenting on the trend, Vice President of Highcap Securities Limited, David Adonri, noted that rising treasury bill issuance signals increasing government financing pressure, which may crowd out private sector funding. He also stressed the need for deeper participation in the commercial paper segment through the Nigerian Exchange (NGX), saying it would improve liquidity, diversify investment options, and strengthen short-term capital market activity.

source: The Guardian