In 2024, the Central Bank of Nigeria (CBN) successfully raised N11.29 trillion through Nigerian Treasury Bills (NTBs), marking a 106.4% increase from the N5.47 trillion raised in 2023. This surge in NTB subscriptions reflects investor confidence in Nigeria’s sovereign debt, driven by the desire for higher returns amid rising inflation. The CBN has raised the interest rate significantly, pushing the yield on 364-day NTBs to 23.5% in November, signaling the nation’s tightening monetary policy aimed at stabilizing inflation and the foreign exchange market.
Throughout 2024, the CBN offered a total of N6.42 trillion in NTBs but saw subscriptions reach N34.16 trillion, indicating strong demand. The higher yields, particularly for longer-tenure NTBs, suggest that investors are seeking long-term investments despite the increasing risk premiums. The demand for longer maturity bills has grown, with the 364-day NTBs attracting the most interest, having a subscription of N30.67 trillion compared to other tenors. This trend reflects cautious optimism in Nigeria’s economic outlook, with investors strategically positioning for diverse investment horizons.
Despite the increase in NTB yields, analysts view the CBN’s actions as beneficial for boosting foreign exchange liquidity, with expectations that the higher yields will moderate domestic interest rates and contribute to a more stable economic environment. The secondary market has shown some bearish sentiment, particularly after the CBN’s rate hike in November, but experts predict that liquidity constraints could lead to higher yields in the coming weeks as demand for NTBs wanes.
