Nigeria’s fixed-income market extended its rally last week as abundant system liquidity and sustained investor demand drove yields lower across both Treasury Bills and Federal Government of Nigeria (FGN) bonds.
According to Afrinvest Securities’ market update, trading in the Nigerian Treasury Bills (NT-Bills) secondary market was broadly bullish, underpinned by strong liquidity, which stood at ₦4.63 trillion long as of Wednesday, January 28, 2026. Investor demand was concentrated at the long end of the curve, reflecting expectations of further moderation in yields.
As a result, the average NT-Bills yield declined by 28 basis points week-on-week to 18.22%, from 18.50% in the prior week.
Long-dated NT-Bills Lead the Rally
The rally was most pronounced at the long end of the NT-Bills curve. The 17-Dec-2026, 10-Dec-2026, and 7-Jan-2027 maturities recorded notable yield declines of 176bps, 163bps, and 153bps respectively, translating into an average 47bps drop at the long-term segment.
By contrast, activity at the short and mid segments of the curve remained muted, with yields easing marginally by 3bps and 6bps respectively.
DMO to Offer ₦1.15trn at NT-Bills Auction
Attention this week turns to the Debt Management Office (DMO), which is scheduled to offer ₦1.15 trillion at the NT-Bills Primary Market Auction (PMA) on Wednesday, February 4, 2026. The auction will span the 91-day (₦150bn), 182-day (₦200bn), and 364-day (₦800bn) tenors, aimed at refinancing ₦668.86bn in maturing bills.
Afrinvest expects stop rates to remain relatively stable, with the following indicative ranges:
91-day: 15.50% – 15.90%
182-day: 16.50% – 16.80%
364-day: 18.30% – 18.50%
Market sentiment is expected to remain shaped by liquidity conditions and the outcome of the PMA, with investors advised to selectively position across relatively attractive maturities while also monitoring available commercial paper and corporate debt issuances.
FGN Bond Yields Fall to 16.48%
Bullish sentiment also dominated the FGN bond market, where yields declined across the curve. The average benchmark bond yield fell by 42bps week-on-week to 16.48%, from 16.90% previously.
Short-, mid-, and long-term bond yields declined by 58bps, 60bps, and 13bps respectively, reflecting a broad-based rally driven by expectations of a lower interest-rate environment and strong reinvestment demand.
Strong Demand at January FGN Bond Auction
At the FGN bond PMA held on January 26, 2026, the DMO offered ₦900bn across the FGN FEB 2031, FGN FEB 2034, and FGN JAN 2035 instruments. Investor appetite was robust, with total subscriptions significantly exceeding amounts on offer.
The FGN FEB 2034 bond recorded the strongest demand, with a subscription ratio of 2.52x, while the FGN JAN 2035 bond saw the highest oversubscription at 3.66x, underscoring persistent demand for duration amid expectations of declining yields.
Outlook: Demand Likely to Remain Firm
Looking ahead, analysts expect demand to remain resilient as investors continue to fill unmet bids from recent auctions. With liquidity conditions still supportive and rate-cut expectations gaining traction, yields across the curve may remain under downward pressure in the near term.
For portfolio managers, the current environment favours selective positioning in maturities offering relatively attractive yields, while balancing duration risk against the possibility of further compression in rates.
