Nigeria’s borrowing market faces uncertainty as securities allotments plunge

Nigeria’s fixed-income market got here underneath recent stress in October as authorities securities allotments plunged by 55.86 per cent to N9.50 trillion from N21.53 trillion in September, exposing weakening investor demand, rising borrowing prices and rising uncertainty over the Central Bank of Nigeria’s liquidity administration technique.

The sharp decline, representing a N12.03 trillion discount in securities allotted, additionally highlights the widening hole between buyers’ urge for food for presidency debt and the quantity financial authorities are keen to just accept at auctions.

Data from the Financial Markets Dealers Association (FMDA) October 2026 market report confirmed that the decline was largely pushed by a 64.69 per cent collapse in Open Market Operations (OMO) allotments, which fell to N6.18 trillion from N17.51 trillion.

Nigerian Treasury Bills (NTBs) allotments additionally dropped by 45.86 per cent to N1.31 trillion from N2.42 trillion, whereas Federal Government of Nigeria (FGN) bond allotments supplied the one optimistic motion, rising by 25.70 per cent to N2.01 trillion.

The weakening demand indicators additional uncovered the tough circumstances within the home debt market. The bid-to-cover ratio for Treasury Bills fell sharply to 2.19 instances from 5.11 instances, whereas OMO declined to 1.70 instances from 3.69 instances.

For FGN bonds, the ratio dropped to 1.00 instances from 1.49 instances, indicating that subscriptions have been barely adequate to cowl the quantity supplied.

The scenario was significantly pronounced on the October 28 Treasury Bills public sale, the place the Debt Management Office (DMO) obtained subscriptions of N1.91 trillion in opposition to an N800 billion supply however allotted solely N71.16 billion, rejecting roughly N1.84 trillion in bids.

Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has beforehand warned that exceptionally excessive rates of interest on authorities securities are growing home borrowing and debt-servicing prices.