Nigeria’s fixed-income market opened in September with strong auction outcomes, reinforcing resilient investor appetite amid abundant liquidity and shifting macroeconomic signals. The Central Bank of Nigeria (CBN) OMO auction on September 2 was heavily oversubscribed, with bids of ₦1.18 trillion against an offer of ₦600 billion, leading to ₦620.65 billion in allotments at a stop rate of 26.44%, a marginal 0.05bps decline. The following day, the Nigerian Treasury Bill (NTB) auction revealed investors’ clear preference for longer-dated paper, with the 364-day bill oversubscribed 2.68 times and clearing at 17.69% (+0.25bps), while shorter tenors recorded weaker demand. Together, the auctions highlight the persistence of liquidity in the system and investors’ drive to secure elevated returns, even as the government borrowing needs expand. Secondary market activity further reflected these conditions, with mild yield compression across bonds and NTBs, reflecting improved liquidity and steady confidence in longer-duration securities.
This picture locally unfolded against a complex global and domestic backdrop. President Tinubu’s announcement that Nigeria achieved its 2025 non-oil revenue target as early as August 2025 boosted fiscal credibility and investor sentiment, potentially reducing near-term sovereign borrowing pressure. However, external risks remain: the UK gilt yields hit a 27-year high, Eurozone inflation ticked above the European Central Bank’s (ECB) target, and global oil markets swung on OPEC+ supply signals and geopolitical tensions, with Brent and WTI slipping to $65.58 and $61.97 respectively, by the end of the week. Gold surged to near-record levels of $3,550 per ounce, buoyed by safe-haven demand and expectations of multiple Fed rate cuts, while concerns over Fed independence under President Trump added to volatility. For Nigeria, these crosscurrents mean that while domestic reforms and revenue gains support market stability, elevated global borrowing costs and shifts in commodity prices continue to shape investor appetite and capital flows.
The interbank liquidity position opened with a surplus of over ₦1.60 trillion on Thursday against Monday’s opening of ₦1.4 trillion, closing out a week awash with cash despite the auctions. Money market rates held steady through the week, with the Open Repo Rate (OPR) anchored around 26.50% and Overnight (O/N) edging from 26.88% to 27.00%, before closing the week at 26.50% and 27.00% respectively. At the FX market, the Naira traded between $/₦1,508.00 and $/₦1,531.00 during the week, closing at $/₦1,511.50 on Thursday.
The CBN’s Open Market Operation (OMO) auction held on September 2, 2025, featured only the 84-day bill, which was heavily oversubscribed with bids of ₦1.18tn against an offer of ₦600bn, prompting the CBN to allot ₦620.65bn. The stop rate cleared at 26.44% (-0.05bps) with a 0.07bps effective yield decline from its previous close, reflecting strong investor demand and ample system liquidity. This outcome suggests mild yield compression at the short end of the curve, as the CBN continues to sterilize excess liquidity while accommodating robust market appetite and cost control.
TENOR | AUCTION DATE | OFFER (₦‘ B) | BIDS (₦‘ B) | RANGE OF BIDS (%) | STOP RATES (%) | PREVIOUS STOP RATES (%) | TOTAL SALE (₦‘ B) |
84-DAY | 02-09-2025 | 600.00 | 1,179.60 | 26.2990-26.4900 | 26.4400 | 26.4900 | 620.65 |
The result of the NTB auction conducted by the DMO on September 3, 2025, with an offer of a total of ₦480bn across three tenors, reaffirmed the market’s preference for longer-dated paper and investors hunt for yield against a backdrop of sticky inflation, surplus liquidity, and heightened fiscal borrowing needs.
Across the board, the bid-to-offer cover was 70.6% (91-day), 48.0% (182-day), and 268.3% (364-day). Indicating weak demand for the short- and mid-day, while the 364-day had an exceptional upward surge of 2.68 times oversubscription. Final allotment against offer stood at 69.4% for the short day with the stop rate at 15.32%, a decline of (-0.02bps) from the previous auction and year-on-year (-1.68bps). The 182-day bill stop rate remained unchanged at 15.50%, year-on-year (-2.00bps), with all allotted at 47.9%. While the 364-day bill cleared at 17.69% (+0.25bps) and year-on-year (-1.25bps), with allotment of 146.3% against its offer, indicating investors’ demand for higher returns at the long end. Effective yield for the short and long-day were 15.93% (-0.03bps) and 21.47% (+0.36bps) respectively, with the mid-day unchanged at 16.80%.
Overall, allotment volume rose by 48.1% compared to the previous auction, indicating increased funding needs. Demand remained heavily skewed toward the 364-day bill, reinforcing the dominance of the 1-year tenor as investors sought to secure elevated yields amid persistent inflationary pressures and the prospect of monetary tightening. Institutional investors are likely to sustain concentration in longer-dated paper, while more cautious retail investors may adopt strategies to hedge reinvestment risks. Should the oversubscription trend on the 364-day bill persist, further upward adjustments in long-end rates remain a possibility in subsequent auctions.
AUCTION DATE | 03-09-2025 | 03-09-2025 | 03-09-2025 |
ALLOTMENT DATE | 04-09-2025 | 04-09-2025 | 04-09-2025 |
MATURITY DATE | 04-12-2025 | 05-03-2026 | 03-09-2026 |
TENOR | 91-DAY | 182-DAY | 364-DAY |
OFFER (₦) | 50,000,000,000 | 80,000,000,000 | 350,000,000,000 |
SUBSCRIPTION (₦) | 35,296,674,000 | 38,355,273,000 | 938,869,422,000 |
ALLOTMENT (₦) | 34,703,230,000 | 38,355,273,000 | 512,190,828,000 |
RANGE OF BIDS (%) | 15.0000 – 18.0300 | 15.0000 – 15.5000 | 16.5000 – 21.0200 |
STOP RATES (%) | 15.3200 | 15.5000 | 17.6900 |
PREVIOUS STOP RATES (%) | 15.3500 | 15.5000 | 17.4400 |
Mild yield adjustments in the secondary market signaled improved liquidity conditions and steady confidence in longer-duration securities, the 2031s at 17.47% (−47 bps), 2032s at 17.41% (−41 bps), and 2033s at 17.36% (−34 bps), while the 26-April 2029s steady at 17.06% and the 17-April at 17.77% (−9 bps). Demand broadly matched supply and spreads remained moderate compared to the previous week which featured minimal activity.
On the short end, longer-dated OMOs eased slightly, with the 364-day (6-Jan) closing at 27.06% (−6 bps) and the 361-day (7-Oct) at 26.89% (−11 bps), while NTBs recorded sharper declines as the 91-day (4-Dec) fell to 17.19% (−95 bps) and the 364-day (5-Mar) to 18.74% (−68 bps), reflecting a compression in short-term risk premiums as liquidity filtered through the yield curve.
President Bola Ahmed Tinubu announced that Nigeria achieved its 2025 non-oil revenue target n August 2025, driven largely by growth in the non-oil sector and ongoing economic reforms. He highlighted improved forex transparency, renewed fiscal credibility, and the core pillars of the Renewed Hope Agenda, spanning infrastructure, agricultural mechanisation, healthcare, food sovereignty, and security, as anchors of the stability and growth observed. This early revenue milestone strengthens Nigeria’s fiscal position, potentially easing near-term borrowing pressure while enhancing investor confidence in sovereign debt sustainability. For markets, the development is a constructive signal for credit risk perception, helping to anchor yields and sustain foreign interest in naira assets, particularly where reforms continue to diversify revenue streams and drive macroeconomic stability.
The UK long-term borrowing costs hit their highest since 1998, with 30-year gilt yields climbing to 5.72%, increasing the government’s debt servicing burden and piling pressure on Chancellor Rachel Reeves ahead of the autumn Budget. The Pound Sterling also weakened by over 1% against the dollar, reflecting market jitters over fiscal sustainability and potential tax hikes.
An indication that elevated developed-market yields may divert capital flows away from Nigeria and other frontier markets, pushing up local borrowing costs and amplifying fiscal pressures. A weaker pound could also reduce remittance inflows from the UK; one of Nigeria’s key diaspora corridors, tightening FX supply and adding a strain on the naira. This buttresses the risk of higher financing costs and currency pressure for Nigeria in the near term.
Eurozone inflation quickened to 2.1% in August, just above the European Central Bank (ECB)’s 2% target, reinforcing expectations that policymakers could pause further rate cuts at the meeting on September 11, with core inflation steady at 2.3% and services easing. Thereby signaling a near-term steady rate environment for the fixed income market, keeping euro-area bond yields supported and limiting room for rallies, while also tempering foreign appetite for higher-risk emerging market debt, given the narrower yield differentials. However, with December still flagged as a possible window for a rate cut where tariffs and slowing growth weigh more heavily, a medium-term dovish tilt remains, which could support bond prices later in the year.
Gold surged to around $3,550 per ounce on Friday, near record highs and up by more than 3% in the week, as weakening US labour data, rising layoffs, softer job openings, and reports of joblessness were responsible, enabling the markets to price in up to three Federal Reserve rate cuts this year, lowering the opportunity cost of holding bullion. Safe-haven demand was further fueled by geopolitical risks, global trade frictions, and heightened concerns over the US Federal Reserve’s independence, with President Trump’s pressure on monetary policy and dovish appointments like that of Stephen Miran, raising uncertainty around institutional credibility. Against this backdrop, Goldman Sachs’ baseline forecast of $4,000 by mid-2026 appeared increasingly realistic, while its extreme scenario prediction of gold hitting $5,000 where faith in the Fed erodes, emphasises the metal’s upside risk in an environment of policy and political turbulence.
The Nigerian Exchange (NGX) All-Share Index (ASI) closed the week bullish on Thursday, September 4, 2025. The benchmark index shed 0.53% week-on-week to settle at 138,980.01 points, compared to the week’s opening level of 139,722.19 points. Despite a mid-week dip to 138,159.25 points on Wednesday, the market staged a mild rebound ahead of the public holiday declared for Eid-ul-Mawlid. Overall, sentiment remained cautious, reflecting the impact of inflationary pressures and profit-taking activities, with investors awaiting fresh catalysts from corporate earnings and economic data.
Global oil markets swung sharply between September 1st and 5th, 2025, as prices moved between geopolitical risks and mounting supply concerns. The week opened with gains, with Brent climbing above $68 per barrel and WTI over $64, supported by intensifying Russia-Ukraine hostilities and renewed strikes on its energy infrastructure. Traders also weighed the impact of Washington’s secondary tariffs on India’s Russian oil imports and signs of resilience from China’s manufacturing sector. Notwithstanding, expectations of an oversupplied market and waning seasonal demand tempered the rally, keeping investors cautious ahead of the Organisation of the Petroleum Exporting Countries (OPEC+) policy meeting.
By midweek, momentum reversed as reports surfaced that OPEC+ may raise production to reclaim market share, sending Brent down to $65.58 and WTI toward $61.97 by Friday. The bearish tone was reinforced by a surprise US crude inventory build of 2.4 million barrels, including a 1.6 million-barrel surge in Cushing, Oklahoma, the largest since March, alongside weak American manufacturing data and slowing economic growth. Rising output from both OPEC+ and US shale producers further clouded demand prospects, pushing oil toward a weekly decline. Yet, geopolitical undercurrents remained at play, with President Trump urging Europe to halt Russian oil imports, leaving markets on edge as OPEC+ deliberations loom.
The week ahead is defined by expectations of over ₦230bn in OMO and NTB maturities, a development that could inject significant liquidity into the system, prompting CBN OMO(s) to mop up liquidity.
In Africa, monetary dynamics are diverging as Ghana’s eighth straight month of easing inflation boosts regional policy confidence, Egypt’s surprise rate cut signals a pro-growth pivot, while Ethiopia faces renewed uncertainty following the resignation of its central bank governor after key reforms.
Globally, markets await the US CPI report for clues on the Fed’s policy path, even as China’s military parade, viewed as a projection of rising geopolitical power, heightens caution across commodities, currencies, and digital assets. Oil prices, meanwhile, remain under pressure from supply constraints and geopolitical tensions, underscoring a fragile balance between global demand recovery and output discipline, factors that keep risk premiums elevated for investors.
By: Sandra A. Aghaizu
In London, the cost of borrowing climbs,
to heights not seen since the late nineties.
The pound falters, markets whisper doubt,
and the Chancellor feels the weight of numbers pressing in.
But this is not Britain’s burden alone.
Across the seas, the tremor reaches Nigeria.
When yields rise in safe havens,
capital flees, and risk is left stranded.
Our borrowing grows heavier,
our fiscal breath shorter.
Even the pound’s weakness carries a shadow.
What our brothers and sisters in the UK send home
arrives thinner,
their hard-earned pounds stretch into fewer naira.
The lifeline weakens,
the flow of foreign exchange slows,
and the naira feels the strain.
Its a sharp yet quiet reminder:
the world is one web.
A shake in the City echoes on Broad Street.
A storm in another’s sky scatters our own seeds.
So, the task before us is not to wish for calm seas abroad,
but to anchor ourselves deeply,
to build reserves, strengthen our roots,
so that when giants move,
we bend, but do not break.
