Nigeria’s fixed-income market value reached N99.30 trillion on February 5, 2026, following a broad decline in Treasury bills and Federal Government bond yields. The debt market in Nigeria is seeing significant movements in yields and investor activity.
This growth occurred as improved system liquidity reduced borrowing costs despite the prevailing tight monetary policy stance of the Central Bank of Nigeria.
Market data from the FMDQ Securities Exchange showed that investor demand for government securities remained strong across short, mid, and long tenors in the debt market. Consequently, the inflow of funds from maturing instruments effectively countered the impact of recent interest rate hikes and aggressive short-term issuances.
Treasury bills maturing between October and December 2026 experienced the most significant yield reductions during the trading session. Furthermore, investors showed a marked preference for short- and mid-term instruments to balance their returns against potential duration risks in the debt market.
Sovereign bonds with maturities spanning 2027 to 2035 also closed with lower yields as buying interest intensified. However, yields on ultra-long-dated bonds exceeding the year 2040 remained largely stable due to lingering concerns over long-term inflation and fiscal sustainability.
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Benchmark yields for Treasury bills between March and June 2026 ranged from 15.55% to 16.65% during the session. Meanwhile, mid-term FGN bonds maturing between 2031 and 2036 settled within a bracket of 16.25% to 16.88% as the market adjusted.
The bullish trend in the fixed-income sector was further supported by moderating rates in the domestic money market. Specifically, the overnight rate dropped to 22.80% while the Open Repo Rate closed at 22.50% following significant liquidity injections into the banking system.
This easing of financial conditions followed the Central Bank of Nigeria’s decision to inject N1.7 trillion into the system through various repayments in early February. As a result, interbank rates declined, providing relief from the volatile auction rates observed throughout January. Importantly, shifts in the debt market play a key role in these rate movements.
Commercial banks, pension funds, and asset managers continue to prioritize government securities in their asset allocation strategies due to limited alternative opportunities. Despite high policy rates, these institutions are increasingly rebalancing their portfolios toward instruments that offer near-term stability.
This market adjustment reflects a stabilizing financial environment essential for sustainable domestic debt management and national economic planning. Such trends in the debt market remain vital for maintaining investor confidence as the federal government manages its fiscal obligations within a high-interest rate regime.
