Nigeria's Debt Management Office (DMO) has successfully raised a substantial N1.144 trillion from its inaugural Nigerian Treasury Bills (NTB) auction for the year 2026. The auction, which took place on January 7, 2026, saw investors maintain a strong demand for government securities, leading to an increase in stop rates across all maturities offered.
Strong Investor Appetite Drives Auction Results
The auction results revealed a significant appetite for government paper, particularly at the longer end of the curve. The breakdown shows that the DMO raised N108.17 billion for the 91-day bill, N48.23 billion for the 182-day tenor, and a dominant N987.78 billion for the 364-day paper. This highlights a clear investor preference for longer-dated instruments in the current economic climate.
Market analysts noted that the upward re-pricing of these risk-free assets reflects investors' search for a hedge against inflation and ongoing policy uncertainty. Despite the higher rates, demand remained resilient, underscoring robust system liquidity and a willingness to lock in elevated yields. The one-year paper was the centrepiece of the sale, with total subscriptions reaching approximately N1.38 trillion against an offer of N800 billion. The stop rate for this 364-day tenor climbed to 18.47 per cent, marking the sharpest increase.
Global Economic Outlook for 2026
This domestic financial activity coincides with the release of the United Nations' World Economic Situation and Prospects 2026 report. The report projects that global economic output will grow by 2.7 per cent this year. This figure is slightly below the 2.8 per cent estimated for 2025 and remains well under the pre-pandemic average growth rate of 3.2 per cent.
The UN report provided regional forecasts, including:
- United States: Growth is projected at 2.0%, up from 1.9% in 2025.
- European Union: Forecast at 1.3% for 2026, down from 1.5%.
- Africa: Output is projected to grow by 4.0%, marginally up from 3.9% in 2025, though high debt and climate shocks pose significant risks.
- West Asia: GDP is expected to grow by 4.1%, a rise from 3.4%.
Implications for Nigeria and Broader Markets
The successful NTB auction signals continued investor confidence in Nigerian government securities as a key asset class. The strong demand, especially for the high-yielding one-year bill, suggests that local investors are prioritising instruments that offer better returns and protection against reinvestment risk. This comes amid a global trade landscape that proved resilient in 2025, expanding by 3.8%, though growth is expected to slow to 2.2% in 2026.
For Nigeria, the ability to raise such a significant sum domestically is crucial for government financing. However, the rising stop rates also indicate the cost of borrowing for the government is increasing. The juxtaposition of this domestic auction with the modest global growth forecast underscores the complex economic environment Nigerian policymakers must navigate in 2026.
