Investors Pull Back as Treasury Bill Subscriptions Fall to ₦6.13 Trillion
Investor appetite for Nigerian Treasury Bills (NTBs) weakened at the start of 2026 as falling yields reduced the attractiveness of the short-term government securities.
Data from the Central Bank of Nigeria (CBN) shows that total subscription to NTBs dropped significantly in the first two months of the year despite continued investor participation in government debt instruments.
Here is a breakdown of the key developments.
NTB Subscriptions Drop Sharply
Total investor subscription to Treasury Bills between January and February 2026 stood at ₦6.13 trillion.
This represents a 37% decline compared with the ₦9.68 trillion recorded during the same period in 2025.
The drop signals that some investors are becoming less enthusiastic about Treasury Bills, largely because yields have started to fall.
January Recorded the Bulk of Investor Demand
In January 2026, investors subscribed about ₦4.69 trillion worth of NTBs.
This was a significant jump compared with the ₦1.54 trillion recorded in February 2025, reflecting strong demand early in the year as investors tried to lock in attractive yields before they declined further.
Government Offered More Bills but Raised Less Money
Interestingly, the government increased the amount of Treasury Bills offered to investors.
During the first two months of 2026:
• About ₦2.3 trillion worth of NTBs were offered to investors
• This represents a 51.8% increase compared with the ₦1.52 trillion offered during the same period in 2025
However, the CBN eventually allotted about ₦2.1 trillion, which is 23% lower than the ₦2.72 trillion raised during the same period last year.
This shows that despite strong subscription figures, actual borrowings from the market declined.
Treasury Bill Yields Have Declined
One of the main reasons for the drop in investor enthusiasm is the decline in Treasury Bill yields.
Recent auction results show:
• 364-Day NTB yield dropped to about 16.99% from 18.43% last year
• 182-Day NTB yield fell to about 16.65% from 18%
• 91-Day NTB yield declined to about 15.84% from 17%
Lower yields reduce the income investors earn, making the instrument slightly less attractive compared with when rates were higher.
CBN Is Intentionally Reducing Yields
The drop in yields is partly due to policy decisions by the Central Bank of Nigeria.
The apex bank has been scaling back the high discount rates previously offered on Treasury Bills because:
• Investor demand remains strong
• Inflation has started to decline
• Monetary policy is being adjusted gradually
This strategy helps the CBN manage liquidity in the financial system and support economic stability.
Inflation Is Beginning to Decline
Nigeria’s inflation rate has shown signs of easing.
As of January 2026, inflation stood at about 15.05%, representing a gradual decline compared with previous months.
Lower inflation typically leads to lower interest rates over time, which partly explains the declining Treasury Bill yields.
Investors Prefer Long-Term Treasury Bills
Despite the overall decline in subscriptions, longer-tenor Treasury Bills remain the most popular among investors.
Out of the ₦6.13 trillion total subscription, about ₦5.8 trillion went into longer-maturity instruments, particularly the 364-day Treasury Bills.
This suggests that investors are trying to lock in current yields for a longer period before rates fall further.
Interest Rate Outlook Remains Uncertain
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria recently reduced the Monetary Policy Rate (MPR) slightly to 26.50%.
The rate cut reflects:
• slowing inflation
• improving foreign exchange stability
• efforts to support economic growth
However, analysts say the reduction may not immediately cause a major drop in fixed-income yields.
Analysts Expect Yields to Decline Slowly
According to analysts at Cordros Research, yields in the fixed-income market may decline gradually rather than sharply.
Several factors will continue to influence the market, including:
• Government borrowing needs
• Liquidity conditions in the banking system
• The pace of inflation decline
• Future monetary policy decisions
What This Means for Investors
The current situation suggests that:
• Treasury Bills are still safe investments backed by the government
• However, returns are gradually declining
• Investors may increasingly seek longer-tenor instruments to preserve yield levels
For fixed-income investors, the market is entering a phase where yield compression may become a key theme in 2026.
Investor appetite for Nigerian Treasury Bills (NTBs) weakened at the start of 2026 as falling yields reduced the attractiveness of the short-term government securities.
Data from the Central Bank of Nigeria (CBN) shows that total subscription to NTBs dropped significantly in the first two months of the year despite continued investor participation in government debt instruments.
Here is a breakdown of the key developments.
NTB Subscriptions Drop SharplyTotal investor subscription to Treasury Bills between January and February 2026 stood at ₦6.13 trillion.
This represents a 37% decline compared with the ₦9.68 trillion recorded during the same period in 2025.
The drop signals that some investors are becoming less enthusiastic about Treasury Bills, largely because yields have started to fall.
January Recorded the Bulk of Investor DemandIn January 2026, investors subscribed about ₦4.69 trillion worth of NTBs.
This was a significant jump compared with the ₦1.54 trillion recorded in February 2025, reflecting strong demand early in the year as investors tried to lock in attractive yields before they declined further.
Government Offered More Bills but Raised Less MoneyInterestingly, the government increased the amount of Treasury Bills offered to investors.
During the first two months of 2026:
• About ₦2.3 trillion worth of NTBs were offered to investors
• This represents a 51.8% increase compared with the ₦1.52 trillion offered during the same period in 2025
However, the CBN eventually allotted about ₦2.1 trillion, which is 23% lower than the ₦2.72 trillion raised during the same period last year.
This shows that despite strong subscription figures, actual borrowings from the market declined.
Treasury Bill Yields Have DeclinedOne of the main reasons for the drop in investor enthusiasm is the decline in Treasury Bill yields.
Recent auction results show:
• 364-Day NTB yield dropped to about 16.99% from 18.43% last year
• 182-Day NTB yield fell to about 16.65% from 18%
• 91-Day NTB yield declined to about 15.84% from 17%
Lower yields reduce the income investors earn, making the instrument slightly less attractive compared with when rates were higher.
CBN Is Intentionally Reducing YieldsThe drop in yields is partly due to policy decisions by the Central Bank of Nigeria.
The apex bank has been scaling back the high discount rates previously offered on Treasury Bills because:
• Investor demand remains strong
• Inflation has started to decline
• Monetary policy is being adjusted gradually
This strategy helps the CBN manage liquidity in the financial system and support economic stability.
Inflation Is Beginning to DeclineNigeria’s inflation rate has shown signs of easing.
As of January 2026, inflation stood at about 15.05%, representing a gradual decline compared with previous months.
Lower inflation typically leads to lower interest rates over time, which partly explains the declining Treasury Bill yields.
Investors Prefer Long-Term Treasury BillsDespite the overall decline in subscriptions, longer-tenor Treasury Bills remain the most popular among investors.
Out of the ₦6.13 trillion total subscription, about ₦5.8 trillion went into longer-maturity instruments, particularly the 364-day Treasury Bills.
This suggests that investors are trying to lock in current yields for a longer period before rates fall further.
Interest Rate Outlook Remains UncertainThe Monetary Policy Committee (MPC) of the Central Bank of Nigeria recently reduced the Monetary Policy Rate (MPR) slightly to 26.50%.
The rate cut reflects:
• slowing inflation
• improving foreign exchange stability
• efforts to support economic growth
However, analysts say the reduction may not immediately cause a major drop in fixed-income yields.
Analysts Expect Yields to Decline SlowlyAccording to analysts at Cordros Research, yields in the fixed-income market may decline gradually rather than sharply.
Several factors will continue to influence the market, including:
• Government borrowing needs
• Liquidity conditions in the banking system
• The pace of inflation decline
• Future monetary policy decisions
What This Means for Investors
The current situation suggests that:
• Treasury Bills are still safe investments backed by the government
• However, returns are gradually declining
• Investors may increasingly seek longer-tenor instruments to preserve yield levels
For fixed-income investors, the market is entering a phase where yield compression may become a key theme in 2026.
