In a year marked by economic reforms and efforts to stabilize Nigeria's financial system, the Central Bank of Nigeria (CBN) successfully mobilized an impressive N10.4 trillion through the issuance of Nigerian Treasury Bills (NTBs) throughout 2025. This figure, drawn from primary market auction data released by the apex bank, underscores the enduring appeal of these short-term government securities as a safe haven for investors navigating turbulent economic waters. While the amount raised reflects a minor dip of 1.09% compared to the N10.52 trillion garnered in 2024, it highlights the resilience of the NTB market even as broader monetary policies evolve under Governor Olayemi Cardoso's leadership.
The NTB market has long served as a barometer for investor sentiment in Nigeria, where double-digit inflation and currency fluctuations have persisted as key challenges. In 2025, despite global headwinds such as fluctuating oil prices and domestic reforms including the unification of exchange rates, investors flocked to NTBs for their risk-free status. These instruments, which mature in 91, 182, or 364 days, offer a predictable return backed by the federal government, making them an ideal hedge against volatility in equities, foreign exchange, and other asset classes. The slight year-on-year decline in funds raised does not detract from the overall robustness; rather, it points to a more nuanced dynamic where increased supply met with adjusted demand, ultimately sustaining liquidity inflows into government coffers.
A deeper dive into the auction mechanics reveals the CBN's proactive stance. The bank substantially ramped up its NTB offerings, issuing a total of N8.7 trillion worth of bills in 2025—a whopping 51.1% surge from the N5.73 trillion offered in 2024. This aggressive expansion was part of a broader strategy to mop up excess liquidity in the banking system, thereby helping to rein in inflationary pressures that had plagued the economy. By flooding the market with more supply, the CBN aimed to absorb surplus funds from commercial banks and institutional investors, preventing them from fueling speculative activities elsewhere. However, this increased availability coincided with a notable pullback in investor subscriptions, which totaled N28.37 trillion in 2025, down 13.2% from the N32.71 trillion recorded the previous year.
This subscription dip can be attributed to several factors. For one, the overarching monetary tightening cycle that began in earnest in 2024 under Cardoso's tenure had started to ease by mid-2025, altering yield expectations. Investors, including pension funds, asset managers, and foreign portfolio players, became more selective, bidding less aggressively amid signals of policy normalization. Additionally, alternative investment avenues, such as Open Market Operations (OMOs) and improved fixed deposit rates from banks, may have siphoned off some capital. Yet, the bid-to-cover ratio—subscriptions relative to offerings—remained healthy at over three times, indicating sustained interest despite the moderated enthusiasm.
One of the most striking developments in 2025 was the across-the-board decline in stop rates, the interest rates at which NTBs are allotted during auctions. For the 91-day tenor, the stop rate plummeted to 15% by September 2025, a full two percentage points lower than the 17% seen in September 2024. The 182-day bill followed suit, easing from 17.5% to 15.3%, while the flagship 364-day tenor closed at 16.78%, marking a steep drop from 20% a year earlier. These reductions translate to lower borrowing costs for the government and cheaper yields for investors, reflecting a deliberate recalibration in the CBN's toolkit.
Analysts from various quarters, including Cordros Research, link these falling yields to a confluence of demand-side strengths and supply-side adjustments. Persistent investor appetite for NTBs stemmed from their role as a buffer against inflation, which, though decelerating, hovered above 20% for much of the year. The CBN's monetary policy committee (MPC) decisions played a pivotal role here. In a landmark move, the benchmark Monetary Policy Rate (MPR) was trimmed marginally from 27.5% to 27% in late 2025, the first cut in over two years, signaling confidence in cooling price pressures. This followed months of positive data: headline inflation eased from peaks above 34% in mid-2024 to around 25% by year-end 2025, buoyed by improved agricultural outputs, stabilized forex markets post-reforms, and tighter liquidity controls.
Governor Cardoso's administration has emphasized a balanced approach—tight enough to combat inflation but flexible enough to support growth. By increasing NTB issuances, the CBN not only managed liquidity but also crowded in private sector credit indirectly, as banks parked funds in safe assets rather than lending recklessly. This strategy aligns with the broader "Reform to Recovery" narrative that defined Nigeria's economic agenda in 2025. Fiscal consolidation efforts, including subsidy removals and tax reforms, freed up resources, reducing the need for aggressive borrowing at punitive rates. Consequently, the yield curve flattened, with shorter tenors benefiting more from the rate cuts due to their sensitivity to immediate policy shifts.
Looking ahead, the outlook remains cautiously optimistic. In its comprehensive report, "Nigeria in 2025: Reform to Recovery — Navigating the Rebound," Cordros Research paints a picture of moderating fixed-income yields amid easing monetary conditions. The analysts project that Treasury bill yields could stabilize around 18.5% by the close of 2025, with bond yields hovering near 18%. This stabilization is expected to restore investor confidence, attracting more foreign inflows as macroeconomic stability takes root. Factors bolstering this forecast include projected GDP growth of 3.5-4% driven by non-oil sectors, a more predictable naira exchange rate around N1,600 to the dollar, and enhanced crude oil production hitting 1.8 million barrels per day.
The implications extend beyond the numbers. For retail investors and households, lower NTB rates mean diminished returns on savings, potentially pushing more capital toward productive investments like stocks or real estate. For the government, cheaper debt servicing frees fiscal space for infrastructure and social programs, crucial in a nation grappling with poverty rates above 40%. However, risks linger: any resurgence in inflation from external shocks, such as geopolitical tensions affecting energy prices, could reverse these gains. The CBN's vigilance will be key, with tools like foreign reserve buffers—bolstered to over $40 billion in 2025—and forex interventions at its disposal.
In essence, the N10.4 trillion raised via NTBs in 2025 encapsulates a transitional phase for Nigeria's economy. From heightened offerings to yield moderation, the trends reflect a maturing policy framework under Cardoso, one that prioritizes sustainability over short-term fixes. As the country navigates this rebound, the NTB market's performance will continue to signal broader recovery, fostering an environment where investor confidence can flourish. With subscriptions still outpacing supply and rates trending downward, the stage is set for a more balanced 2026, where lower borrowing costs could catalyze private sector-led growth and ultimately benefit ordinary Nigerians through job creation and price stability.
This narrative is not just about fiscal metrics; it's a testament to resilience. In a year when many emerging markets faltered, Nigeria's ability to raise substantial funds at easing rates speaks volumes about the efficacy of ongoing reforms. As Cordros aptly notes, the journey from reform-induced pains to recovery gains is underway, with NTBs lighting the path forward.
