Nigeria’s fixed income market swung from early-week bullish momentum to tactical repricing after the MPR cut by 50bps, with yields oscillating within the mid-15% to low-16% band amid aggressive duration positioning and strong Debt Management Office’s (DMO) auction demand (3.38x subscription). Backed by improving reserves, fiscal reforms, 4.07% Gross Domestic Product growth, and sustained Open Market Operations (OMO) yield compression, the macro backdrop signals cautious easing bias, curve bull-flattening potential, and structurally improving sovereign liquidity.
In the final week of February 2026, Nigeria’s markets were shaped by policy shifts, liquidity, and geopolitical developments. FGN bonds saw strong demand for longer-dated papers, with stop rates at 15.74% and 15.50%, while the DMO’s selective allotment reinforced scarcity premiums. The Central Bank of Nigeria (CBN) Monetary Policy Committee held its first meeting of 2026 with a cut in the Monetary Policy Rate (MPR) by 50bps to 26.50%, and OMO auctions showed robust long-tenor appetite, reflecting improved liquidity with a total sale of ₦1.11trn. The Nigerian Exchange All-Share Index (NGX ASI) declined weekly by 1.11% on profit-taking, with mixed sector performance, while the Naira eased slightly by 1.05% amid rising reserves. These occurred alongside FGN Bond coupon payments of ₦546.54bn (Feb.-2028, Aug.-2030, Feb.-2031, and Feb.-2034) and OMO maturity of ₦725.70bn. Globally, U.S. equities struggled on AI fears and soft GDP, while Europe and Asia-Pacific extended gains. Oil traded near six- to seven-month highs before easing on U.S. inventory builds, and gold rose for a fourth consecutive week on trade and geopolitical risks; with Brent crude, West Texas Intermediate (WTI), and bullion closing at $72.79/bbl., $67.42/bbl., and $5,251.00/oz, respectively. Markets balanced cautious optimism with risk aversion, highlighted by policy expectations and structural liquidity trends.
Interbank liquidity opened the week at ₦2.65trn surplus before increasing to a peak of ₦4.58trn mid-week, and ₦3.75trn by Friday, marking a week-to-date increase of 41.4%. Money market rates were largely stable; the Open Repo Rate (OPR) opened at 22.50%, and easing at 22.00% where it closed, while the Overnight rate (O/N) opened at 22.68%, easing at 22.15% before finishing at 22.17%. In the currency market, the Naira traded between $/₦1,343.00 and $/₦1,369.00, closing at $/₦1,363.40 on Friday.
At the secondary market, bond price action was distinctly event-driven this week, after it opened on a bullish note, supported by sentiment following the FGN bond auction results, strength proved short-lived as sell pressure set in shortly after, pushing yield as low as 15.40% from where yields opened at inception. Next after the MPC decision release, the market repriced aggressively after the cut didn’t match investor’s expectations, with yields compressing by nearly 80 basis points to retest the 16.00% level, most pronounced across the 2031–2035 maturities. Overall, the curve oscillated within a mid-15% to low-16% range, reflecting active positioning and duration rebalancing rather than a structural shift in risk appetite. The money market, NTBs, and OMO instruments traded within elevated bands, with NTB yields hovering in the mid- to upper-15% corridor, while OMO bills were within the mid-17% to 18% range. The tone remained relatively flat, with persistent sell-side pressure across the curve, particularly at the 31s, 32s, and 34s, suggesting cautious liquidity deployment and a preference for smart duration exposure amidst evolving rate expectations. In general, market was bullish at the beginning of the week, then went bearish after the MPC cut and has since traded above auction close.
The Debt Management Office (DMO) February 2026 FGN bond auction result signalled strong investor confidence and a clear strategic shift toward longer-duration holdings, reflecting the market view that rates may have peaked. Across the three reopened papers, 7-year 17.95% JUN 2032, 9-year 19.89% MAY 2033, and 10-year 19.00% FEB 2034, total subscription of 3.38x against ₦800 billion offered, with individual ratios of 4.53x, 4.19x, and 7.63x, highlighting abundant liquidity and robust appetite for secure, attractive-yield instruments. DMO selective allotment, with only a total of 0.19x allotted against demand, emphasized scarcity premiums, with stop rates compressed to 15.74% for the Jun-32 and May-33 tenors and 15.50% for the Feb.-34, while secondary market yields fell to as low as 15.40%. The result signals growing validation of the interest rate peak narrative, with disinflation supporting positive real returns, and suggests that, coupled with expectations of MPC easing, the Nigerian bond market is likely to see further yield compression and curve bull-flattening, especially on long-tenor instruments.
FGN BOND | 17.95% JUN. 2032 | 19.89% MAY 2033 | 19.00% FEB. 2034 |
MATURITY DATE | 25-06-2032 | 15-05-2033 | 21-02-2034 |
TENORS | 7 | 9 | 10 |
AMOUNT OFFERED (₦’B) | 300.00 | 400.00 | 100.00 |
SUBSCRIPTION (₦’B) | 851.59 | 874.69 | 972.93 |
AMOUNT ALLOTTED (₦’B) | 188.14 | 208.63 | 127.51 |
STOP RATES (%) | 15.7400 | 15.7400 | 15.5000 |
LAST AUCTION STOP RATES (%) | 17.0000 | 19.8490 | 17.5000 |
The resultant decision of the 304th Monetary Policy Committee meeting on February 24, 2026, to a 50bps reduction in the MPR to 26.50% with the Asymmetric Corridor around the MPR maintained at +50/-450 signals a cautious shift toward growth support, with potential to gradually ease borrowing costs, improve corporate earnings outlooks, and stimulate credit expansion. However, the broader impact will depend heavily on complementary factors, including inflation trajectory, exchange rate stability, fiscal discipline, oil revenue inflows, and liquidity conditions, given the still-elevated 45% Cash Reserve Ratio (CRR). If inflation continues to moderate and FX reserves remain stable, the cut could reinforce investor confidence and sustain market momentum; conversely, weaker oil prices, capital flow volatility, or fiscal slippages could offset the benefits by pressuring the naira and limiting real-sector transmission. Ultimately, the effectiveness of the rate cut will hinge on coordinated monetary and fiscal policy, external sector resilience, and structural reforms that improve productivity and investment climate conditions.
The February 25, 2026, OMO auction reflected strong investor preference for longer-duration instruments and broad yield moderation across tenors. While the 6-day bill saw weak demand with just 0.025x in bids against offer, clearing at 21.94% (-45bps), appetite surged at the long end, where the 167-day bill attracted 8.13x its offer with 5.49x allotted at 18.77% (-67bps). The 104-day tenor was moderately oversubscribed at 1.49x with a meagre sale of 0.05x at 18.45% (-99bps), also below the prior 105-day bill. The stop rate decline across-the-board was in the range below 100bps, signalled rate compression by the CBN, and suggests expectations of further yield easing in addition to a potential flattening bias along the short-to-mid segment of the curve. The Bid-to-Cover Ratio (BCR) was 1.00x, 29.8x, and 1.48x for the 6-, 104-, and 167-day bill respectively. Interestingly, bid range peaked at 21.94%, 20.48%, and 19.99% for the 3 tenors sold, with the 6-day at the peak, indicating it as the only bid tendered with the 104-day having an unusual high BCR.
AUCTION DATE | TENOR | OFFER (₦‘B) | BIDS (₦‘B) | TOTAL SALE (₦‘B) | STOP RATES (%) | PREVIOUS TENOR STOP RATES (%) |
25-02-2026 | 6-DAY | 200.00 | 5.00 | 5.00 | 21.9400 | 22.3900 |
104-DAY | 200.00 | 298.00 | 10.00 | 18.4500 | 19.4400 | |
167-DAY | 200.00 | 1,627.20 | 1,098.47 | 18.7700 | 19.4400 |
President Bola Tinubu’s Executive Order marks a decisive fiscal reset for Nigeria’s oil and gas architecture by reversing multiple revenue retentions embedded in the Petroleum Industry Act and redirecting substantial flows back to the Federation Account, including the 30% Frontier Exploration Fund and the 30% management fee previously retained by NNPC Limited. This materially improves near-term sovereign liquidity, strengthens revenue visibility for federal and subnational budgets, and could reduce borrowing pressures, supporting macro stability, FX confidence, and potentially sovereign credit metrics. By eliminating duplicative deductions, tightening oversight, and repositioning NNPC strictly as a commercial operator, the reform also addresses structural inefficiencies that have diluted net oil inflows despite elevated production recovery. While execution risk and possible, transitional friction with operators must be monitored, the policy tilt toward transparency, centralized remittance, and fiscal consolidation is growth-positive over the medium term, enhancing public investment capacity in infrastructure, energy transition, and social sectors, key multipliers for broader economic expansion.
Further to last year’s ban, the President extended a one-year ban on raw shea nut exports on February 26, 2026. This reinforces Nigeria’s push toward industrialisation and value addition, aiming to shift earnings from low-value raw exports to higher-value processed shea butter, which commands significantly stronger margins. Economically, this policy could boost rural incomes, expand agro-processing capacity, deepen manufacturing activity in the Savanna belt, and gradually improve non-oil export diversification, supporting FX stability over the medium term. The integration of exports under the Nigerian Commodity Exchange framework enhances formalisation, price transparency, and traceability, while the Nigeria Export Supervision Scheme (NESS) support window and livelihood finance mechanism may stimulate credit growth and SME financing in the value chain. However, short-term risks include potential FX inflow decline from raw exports, transitional supply bottlenecks, and informal trade leakages if enforcement is weak. Overall, the measure is structurally positive for domestic manufacturing, development finance activity, and investor sentiment toward agro-processing and Fast-Moving Consumer Goods (FMCG) segments, provided implementation remains coordinated and capacity expansion keeps pace with policy ambition.
The Naira depreciated in the Nigerian Foreign Exchange Market (NFEM), from ₦1,349.24 to ₦1,363.40, with a decline of ₦14.16 (-1.05%) and ₦17.07 (-1.27%) week-on-week, closing at ₦1,363.40 (down from ₦1,346.42 the previous week). Intra-week movements reflected a resilient market despite FX pressures, supported by improved liquidity and steady growth in external reserves.
Foreign reserves further increased, rising from $46.59 billion on February 2 to $49.51 billion by February 25, 2026, with a month-to-date gross gain of approximately $2.92 billion (+6.25%). Blocked funds increased from $561.03 million to $682.85 million (+21.65%), with an improved blocked reserve ratio of 1.38%, showing improved FX liquidity, enhanced reserve management efficiency, and continued progress in clearing outstanding obligations.
Per the National Bureau of Statistics (NBS), Nigeria’s economy expanded with gross GDP by 4.07% year-on-year in Q4, 2025. Marking an acceleration from 3.76% in Q4 2024. Led by stronger sectorial growth recorded in agriculture (4.00% vs. 2.54%), industrial (3.88% vs. 2.49%), services (4.15% vs. 4.75%) and improved oil output with a 6.79% Year-on-Year (YoY) rebound. On a full-year basis, economic growth rate stood at 3.87% (+0.14%), while nominal GDP surged 17.55% to ₦122.81trn, reflecting real expansion despite inflationary effects. Meanwhile, the Dangote Refinery’s commitment to supply up to 65 million litres of petrol daily, exceeding estimated domestic consumption, signals a transformative shift toward energy self-sufficiency, with implications for reduced fuel imports and sustained foreign exchange conservation. These developments have led to gains that are reinforced by the recapitalisation drive led by the Central Bank of Nigeria, under which 20 banks have collectively raised over ₦4.00 trillion, strengthening balance sheets and positioning the banking sector to support credit expansion and absorb external shocks with evolving global trade dynamics.
The Nigerian equities market experienced a volatile week as the Nigerian Exchange Limited (NGX) demonstrated its firm commitment to market integrity with the suspension of Zichis Agro-Allied shares following an extraordinary 772.36% price surge pending an investigation into its stock’s trading activity. The NGX ASI traded with a negative bias during the week, despite an early rally, closing lower overall as profit-taking pressure outweighed bargain hunting. The index opened at 196,283.68 on Monday, driven by renewed buying interest, but reversed course as profit-taking began to 194,504.46 on Tuesday. The downward trend persisted through the week, with the index closing at 194,370.20 on Wednesday and 193,568.71 on Thursday, before closing at 192,826.78 on Friday, as investors locked in gains in bellwether stocks. Sectorial performance was broadly mixed but tilted bearish, with early strength in banking, insurance, and select industrial names fading midweek, while consumer goods and insurance stocks faced pressure. Overall, market breadth weakened as decliners outpaced gainers, leaving the ASI below its weekly peak and signalling cautious sentiment. In general, the ASI recorded a modest week-to-date loss of 1.76% (-3456.90 points) and a week-on-week decline of 1.11% (-2161.02 points), lifting the year-to-date return to +23.91%.
Global financial markets diverged notably as U.S. assets lagged while international equities extended gains. Wall Street remained volatile, pressured by an “AI scare trade” that triggered a selloff in chipmakers and left the S&P 500 on course for a monthly decline, combined with a softer-than-expected Q4 2025 GDP growth of 1.4%; small caps, however, showed relative resilience with the Russell 2000 modestly outperforming. Outside the U.S., sentiment was firmer: Europe’s Stoxx 600 advanced toward an eighth consecutive monthly gain, supported by UK Consumer Price Inflation (CPI) easing to 3.0%, which reinforced expectations of a near-term Bank of England rate cut, while the MSCI Asia-Pacific Index posted its strongest February on record, led by a 20% surge in South Korea’s Kospi and sustained strength in Japan’s TOPIX. In fixed income, G7 yields edged lower as investors reassessed the timing of policy easing, and emerging market spreads narrowed amid ample liquidity. The U.S. dollar held firm as markets priced a more cautious Federal Reserve path relative to peers. Meanwhile, the European Parliament was shaken as it paused ratification of the “Turnberry” trade deal in response to U.S. President Donald Trump’s 15% global import surcharge. This move disrupted the July 2025 agreement’s tariff framework, shifting from structured trade diplomacy to heightened protectionist uncertainty. By stacking the new surcharge on existing duties, the U.S. introduced policy-driven volatility, complicating corporate pricing, weakening forward guidance, and increasing the risk of retaliatory measures. Multinationals are now moving from short-term cost absorption to strategic supply-chain realignments amid growing tariff unpredictability. Overall, cross-asset performance reflected selective risk-taking rather than broad-based momentum, with capital rotating geographically and across sectors in response to evolving growth and policy signals.
Oil markets traded near multi-month highs but ended the week higher amid volatile US–Iran nuclear negotiations, rising US inventories, and renewed trade tensions. On Monday, WTI settled at $67.18/bbl. though Brent closed at $71.79/bbl., supported by optimism over a potential diplomatic “win-win” outcome and limited military-strike risks, amidst concerns over Strait of Hormuz traffic and President Trump’s proposed 15% global tariffs weighed on demand sentiment. By Tuesday, prices eased slightly with WTI at $66.06/bbl. and Brent at $71.24/bbl. as talks were set to resume and a new 10% global tariff took effect. Mid-week, crude extended losses after the US Energy Information Administration (EIA) reported a sharp 15.99 million-barrel inventory build (to 435.8mb), the largest in three years, pushing WTI to $65.80/bbl. and Brent to $70.74/bbl., despite lingering geopolitical risks. By Thursday, prices rebounded with WTI at $66.42/bbl. and Brent at $72.10/bbl., after Iran signalled it would not allow enriched Uranium to leave the country, heightening supply disruption fears ahead of the OPEC+ meeting, even as Saudi-Arabia and broader Gulf exports increased. By weekend, crude steadied but remained pressured, with WTI at $67.42/bbl. and Brent at $72.79/bbl., as the US and Iran agreed to continue negotiations, tempering immediate disruption fears while markets balanced Middle East tensions against expectations of a global supply glut.
Gold posted a volatile but broadly positive week, supported by tariff escalation and geopolitical uncertainty. On Monday, bullion rose 1% to about $5,213.54/oz on renewed US tariff threats and fears of an Iran strike. It fell nearly 2% on Tuesday to around $5,161.00/oz as investors rotated into Treasuries despite lower yields. Prices rebounded on Wednesday at $5,196.69/oz after the 10% global tariff took effect, though the Federal Reserve Bank caution capped gains. On Thursday, gold stabilized near $5,170/oz amid sticky 3% PCE inflation, central bank buying (~60 tonnes monthly), and stalled US-Iran talks. By Friday, bullion firmed to roughly $5,251.00/oz, closing for a fourth straight weekly gain as trade risks and tempered rate-cut expectations (June odds ~50%) sustained safe-haven demand.
The week ahead features key macroeconomic trend determinants for the Nigerian Financial Market, from the scheduled NTB auction on March 4, 2026, with a total offer of ₦1.15bn across three tenors whose outcome will strengthen the near-term DMO pattern in yield compression, alongside the expected inflows of ₦1.75trn from maturing OMO and NTB bills. The auction sale would only mop up a portion of the inflow if the total offer is maintained, resultantly increasing liquidity in an already surplus system, leading to renewed reinvestment pull, and potentially triggering fresh OMO auctions or heightened buying interest in other instruments.
A total monthly inflow of ₦8.91 trillion is anticipated, comprising NTB and OMO maturities, coupon payments, and the redemption of the FGN 21.00% Mar. 2026 bond valued at ₦700 billion.
The breakdown is as follows:
By: Sandra A. Aghaizu
The market began like morning tide,
lifting quietly on hope.
Then the rate was trimmed…
a small cut,
but enough to ripple the waters.
Yields swayed between mid and low teens,
not in panic,
but in recalculation.
Demand stood firm like anchored ships,
reserves rising like a strengthening wind.
Now the curve leans gently forward…
not rushing,
just easing…
as a nation’s credit
learns to breathe a little deep.
