Investors flock to Nigerian bonds as inflation rate drops to 24.5%
NIGERIA'S bond market experienced a significant surge in investor interest in February 2025, following a notable drop in the country's inflation rate to 24.5 percent year-on-year from 34.8 percent in December 2024. The sharp decline, driven by the rebasing of the Consumer Price Index (CPI), combined with compelling yields on government bonds, attracted investors seeking to lock in favorable returns amid expectations of a more accommodative monetary policy.
The Debt Management Office (DMO) conducted its February Federal Government of Nigeria (FGN) bonds primary auction on Monday, February 24, 2025, offering two bond papers worth N350 billion—N200 billion for the April 2029 bond and N150 billion for the February 2031 bond. The auction marked the first since the Monetary Policy Committee (MPC) opted to pause its monetary tightening cycle, fueling speculation that rate cuts could follow in future meetings.
The bond auction recorded overwhelming investor demand, with subscriptions totaling N1.6 trillion, representing a bid-to-offer ratio of 4.7 times – more than double the N669.9 billion subscription recorded in the January auction.
The February 2031 bond attracted the highest interest, accounting for approximately 72 percent of the total subscription, with bids worth N1.2 trillion.
However, the DMO chose to allot only N605 billion of this amount, reflecting the government's prudent debt management strategy.
In total, the agency allotted N910.4 billion across both bond papers, significantly lower than the total subscription amount, underscoring the government's commitment to managing its borrowing levels despite high investor appetite.
The auction also witnessed a decline in marginal rates, with the April 2029 bond clearing at 19.20 percent and the February 2031 bond at 19.30 percent. This represented a substantial drop from the 21.79 percent and 22.50 percent recorded at the previous auction in January.
Market analysts attributed the falling yields to growing expectations of a monetary policy loosening in the coming months, as inflationary pressures ease and the Central Bank of Nigeria (CBN) looks to support economic growth.
The improved inflation outlook has also reduced the negative real returns on fixed-income investments, making government bonds more attractive to investors.
In the secondary market, demand for government bonds remained strong, particularly in the short- and mid-term segments of the yield curve. Investors sought to take advantage of elevated interest rates, despite tight liquidity conditions in the financial system.
Analysts predict that the bullish momentum will persist in the coming weeks, driven by expectations of potential rate cuts and a sustained decline in inflation.
Nigeria's bond market is poised for continued strong performance as investors reposition their portfolios amid evolving macroeconomic conditions. The significant reduction in inflation, combined with attractive yields, is expected to sustain interest in government securities.
However, the DMO's conservative debt issuance strategy signals the government's commitment to balancing its borrowing needs with fiscal discipline.
As the MPC's next policy meeting approaches, market participants will closely watch for signals of a possible monetary policy easing, which could further bolster demand for fixed-income assets in Africa's largest economy.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Post
7 hours ago
- Arabian Post
June 2025 Market Outlook: Essential Economic and Geopolitical Events for Traders by Octa Broker
KUALA LUMPUR, MALAYSIA – Media OutReach Newswire – 2 June 2025 – June 2025 is shaping up to be one of the most eventful months of the year for global markets. For traders, this means opportunity—but also volatility. The economic calendar is packed with macroeconomic data releases and central bank meetings, while geopolitical risks remain close to the surface. Beyond the usual inflation prints and interest rate decisions, markets will also have to digest key developments around global diplomacy: the NATO and G7 summits, peace negotiations in Eastern Europe, U.S. trade talks with China and the European Union, as well as debates around nuclear policy in the Middle East. Add to this the lingering fiscal tensions in Washington, and it's clear that June won't be business as usual. Octa Broker explains why the economic calendar is worth monitoring and what events to watch out for in June 2025. The Role of the Economic Calendar for Traders ADVERTISEMENT For traders, the economic calendar is more than a schedule—it's a risk map. It flags: central bank rate decisions inflation and employment reports Gross Domestic Product (GDP) estimates and growth outlooks high-level summits with potential for market-moving headlines. These events affect not just macro sentiment but also short-term liquidity and intraday volatility. And when several collide—as they will in June—market reactions tend to be sharper, faster, and harder to fade. Anticipating such events in advance allows traders to capitalise on potential opportunities and adjust risk management—some even avoid trading during volatility. Key Economic Events in June 2025 Here are some major events to follow in June: June 4: Bank of Canada (BoC) interest rate decision June 5: European Central Bank (ECB) rate decision June 6: U.S. Non-Farm Payrolls June 11: U.S. Consumer Price Index (CPI) June 15–17: Group-7 (G7) Summit June 17: Bank of Japan (BoJ) rate decision June 18: Federal Reserve (Fed) rate decision—includes Economic Projections and the Dot Plot June 19: Swiss National Bank (SNB) rate decision June 19: Bank of England (BoE) rate decision June 20: People's Bank of China (PBoC) rate decision June 24–25: North Atlantic Treaty Organisation (NATO) Summit June 26–27: European Council Summit June 27: U.S. Personal Consumption Expenditure (PCE) Price Index June 30: German CPI Potential Impact of June Economic and Geopolitical Events For Traders Heightened Volatility Expected ADVERTISEMENT June is shaping up to be an eventful month for currencies and rate-sensitive assets, with seven major central bank meetings scheduled—the BoC, BoE, BoJ, ECB, Fed, SNB, and PBoC. Traders can anticipate heightened volatility not only in the major USD-based pairs but also in equity indices, individual stocks, and commodities. June's Federal Reserve meeting is particularly important, accompanied by updated Economic Projections and the Dot Plot—forward-looking instruments via which markets infer future rate trajectories. Surprises can unleash dramatic repricing in Treasury yields, gold, and risk assets. Macroeconomic Divergence as a Market Driver Inflation paths remain divergent. In the U.S., core CPI slowed to 2.3% YoY, potentially softening the Fed's stance. Meanwhile, ECB officials appear divided: Klaas Knot said inflation risks remain uncertain, while Pierre Wunsch hinted that rates could fall below 2%. This split supports tactical positioning in EUR/USD and EUR/GBP, particularly around central bank commentary. Geopolitical Events Could Disrupt Risk Sentiment June's summits aren't ceremonial. The G7 Summit will cover trade security and energy cooperation, while the NATO meeting will focus on defence spending and alliance posture. Any hawkish statements or surprises around Ukraine, China, or the Middle East could move commodity markets—particularly, oil and gold—and affect defence-sector equities. Bond Market Tensions Could Spill Into FX and Equities Rising Treasury yields, recently breaching 5.0% on 20-year note, are fueling concern over U.S. fiscal policy. As Moody's warned, the sustainability of U.S. debt is becoming a market risk. Traders should watch for safe-haven rotation into gold, Bitcoin, Swiss franc (CHF), and the Japanese yen (JPY). Japan, however, is facing debt troubles of its own, as yields on 30-year bonds recently climbed to multi-decade highs, prompting calls to BoJ to either increase bond buying or halt its plans to gradually reduce such purchases. Either way, traders should keep a close eye on both the U.S. and the Japanese bond markets. Ongoing Trade Negotiations Remain a Wildcard The May U.S.-China joint statement hinted at easing tensions—but markets remain sceptical. There are still several critical obstacles to a comprehensive trade agreement between the parties. For example, on May 12th, China's Ministry of Commerce strengthened control over strategic mineral exports, on which the U.S. is highly dependent. Other critical sticking points include technology transfer issues and Artificial Intelligence (AI), as China's growing semiconductor self-sufficiency efforts are not particularly favoured in Washington. Furthermore, there is still uncertainty as to whether any meaningful progress in trade talks between the U.S. and EU can be achieved in June. Although the parties agreed to fast-track the negotiations, some business leaders are sceptical. June won't be a month for passive positioning. With central banks sending mixed signals, inflation data diverging, and global diplomacy back on the front pages, traders will have to juggle more than just charts. This is the kind of environment where preparation matters more than prediction. Knowing when the Fed drops its Dot Plot is as important as watching where oil prices go after a NATO statement. With overlapping narratives and rising volatility, it's not about calling the top or bottom—it's about managing risk around known catalysts and staying nimble when the unknowns hit. Disclaimer: This content is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to engage in any investment activity. It does not take into account your investment objectives, financial situation, or individual needs. Any action you take based on this content is at your sole discretion and risk. Octa and its affiliates accept no liability for any losses or consequences resulting from reliance on this material. Trading involves risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before making an investment decision. Past performance is not a reliable indicator of future results. Availability of products and services may vary by jurisdiction. Please ensure compliance with your local laws before accessing them. Hashtag: #octa The issuer is solely responsible for the content of this announcement. Octa Octa is an international CFD broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools. The company is involved in a comprehensive network of charitable and humanitarian initiatives, including improving educational infrastructure and funding short-notice relief projects to support local communities. In Southeast Asia, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively.
Tahawul Tech
11 hours ago
- Tahawul Tech
Bespin Global outline their mission to take public sector enterprises to the cloud
Bespin Global, an e& enterprise company outlined in detail how their agile product portfolio is designed to help public sector enterprise navigate and circumvent issues they face when migrating to public sovereign cloud models, during an exclusive roundtable held at the Ritz-Carlton JBR earlier this week. The roundtable was held in conjunction with CPI Media Group, and was moderated by CNME Editor Mark Forker. The topic of the roundtable was entitled, Next-Gen Governance: Powering the Future of Digital Government with Cloud. The series of presentations were delivered by the executive leadership from Bespin Global, which included; Mouteih Chaghlil, CEO of Bespin Global, Bassam Abbasi, Head of Network & Security, at Bespin Global and Sami Wahab, VP – Sales at Bespin Global. The roundtable was attended by IT leaders from the following public sector organisations. Abu Dhabi Mobility Sharjah Muncipality Smart Umm Al Quwain Dubai Multi Commodities Centre Authority (DMCC) Dubai Legal Department EDGE Group Al Kuwait Hospital Dubai Dubai Culture & Arts Ministry of Finance Dubai Air Navigation Services The first session of the roundtable was delivered by Bespin Global CEO, Mouteih Chaghlil, who laid out how the company wants to be the partner of choice for public sector entities looking to accelerate their migration to the cloud. 'We know there are many challenges, and data classification is certainly a big one. What sort of data do I have, what is it, where is it, where does it need to reside, this sort of data classification needs to be determined, but it's not always black and white, and AI is only as good as the data you have. However, what we do know is that 32% of public sector entities in the UAE, KSA and Egypt are already utilising cloud-based customer engagement solutions, and 40% of them are planning to adopt cloud in the next few years. The opportunity is huge, and we know we have the capabilities to build secure and compliant hybrid/multi-cloud environments that support sovereignty and resilience,' said Chaghlil. There was a huge level of engagement and interaction between Chaghlil and those in attendance, with some outlining their desire to remain with SaaS cloud models. Chaghlil then highlighted how public services digitised with cloud and AI can really deliver localised innovation at scale. 'Our cloud-native solutions are tailored to national priorities and governance models. Our AI models trained on localised data ensure cultural and legal alignment. Integration with legacy systems enables a smooth transition without disruption and scalable infrastructure enables a rapid deployment of new services. In addition to this, having real-time access to unified data across agencies improves responsiveness and collaboration,' said Chaghlil. The next presentation was delivered by Bassam Abbasi, Head of Network & Security, at Bespin Global, and he stressed the importance of building a secure hybrid/multi cloud strategy in order to to ensure smooth migrations for mission-critical systems. There was a sharp focus on the role of AI in relation to cybersecurity, and how it builds that resilience and transparency that governments require. Abbasi insisted that people will remain at the core of digital transformation. 'Trust, transparency and control are critical, they are non-negotiable, and we get that. We can implement sovereign cloud models to protect sensitive citizen data, whilst maintaining that transparency on the data in line with clear governance rules and policies. We offer opt-in features and self-service options that ultimately empower users. At the end of the day, that is our goal, we want to take people with us in a way in which they maintain autonomy on the direction, but also have agility with accountability,' said Abbasi. Abbasi also highlighted how the landscape was change dramatically over the next few years. 'Within the next 1-3 years the picture is going to look a lot different due to the fact that public sector enterprises are going to pivot to either hybrid multi-cloud (33%), multiple public clouds (31%) or hybrid cloud (23%), with only 7% planning to remain solely in a datacentre, or private cloud. This change is driven by the need to modernize infrastructure to meet increasing demand for digital citizen services, improve the citizen experience, strengthen data security, and harness the power of emerging technologies. In addition, IT leaders are motivated to modernize their IT environment to prepare for future crises,' said Abbasi. The final presentation of the roundtable was delivered by Sami Wahab, VP – Sales at Bespin Global. His presentation examined the elements that come beyond migrations, and was focused on how Bespin can unlock innovation and increase efficiency in the public sector. He highlighted how Bespin Global's products can 'modernise workforces' across the public sector. 'We know we have the capability to boost productivity and enhance collaboration with our state-of-the-art modern workforce solutions with a secure framework that ensures seamless connectivity and data protection, and it is ultimately designed to transform the way you work. In summary, we design, develop and implement bespoke cloud solutions that specifically cater to your unique business needs,' said Wahab. Wahab concluded a brilliant presentation by giving those attendance some predictions that they envisage over the next few years. 'In terms of the multi-cloud, by 2027, 40% of enterprises will rely on interwoven IT architectures across cloud, core, and edge to support dynamic, location-agnostic workflow priorities. When it comes to GenAI on the cloud, by the end of this year, 70% of enterprises will form strategic ties to cloud providers for GenAI platforms, developer tools, and infrastructure, requiring new corporate controls for data and cost governance – and in terms of cloud data mobility, over the next 12 months, 55% of the G2000 will adopt multi cloud data logistic platforms to enable active data migration between hyperscalers to optimise costs, reduce vendor dependencies, and improve governance,' said Wahab.
Zawya
3 days ago
- Zawya
$21.5bln loan request is Nigeria's external borrowing plan for 2024–2026, FG clarifies
The Federal Government has clarified that Tuesday's $21.5 billion communication by President Bola Tinubu to the National Assembly was a formal request for consideration and approval of the 2024–2026 External Borrowing Rolling Plan, which includes the State Governments. It explained that a borrowing plan does not amount to taking a $21.5 billion loan but only shows a plan of what can be borrowed and where the loans will come from for specific projects that are important to the Federal and State governments, including what will be borrowed by the Federal Government in 2025. Additionally, the Federal Government noted that the proposed Borrowing Rolling Plan is an essential component of the Medium Term Expenditure Framework (MTEF), in accordance with both the Fiscal Responsibility Act 2007 and the Debt Management Office (DMO) Act 2003. According to Government, the Plan outlines the external borrowing framework for both the federal and sub-national governments over a three-year period, accompanied by five detailed appendices on the projects, terms and conditions, implementation period, etc. In a statement on Wednesday, Mohammed Manga, Director, Information and Public Relations in the Federal Ministry of Finance, said by adopting a structured, forward-looking approach, the plan facilitates comprehensive financial planning and avoids the inefficiencies of ad hoc or reactive borrowing practices. 'This strategic method enhances Nigeria's ability to implement effective fiscal policies and mobilize development resources. The borrowing plan does not equate to actual borrowing for the period. The actual borrowing for each year is contained in the annual budget. 'In 2025, the external borrowing component is US $1.23 billion, and it has not yet been drawn. This is planned for H2 2025. 'Also, the plan is for both Federal and several State governments across numerous geopolitical zones including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States. 'Importantly, it should be noted that the Borrowing Rolling Plan does not equate to an automatic increase in the nation's debt burden. The nature of the rolling plan means that borrowings are split over the period of the projects. 'For example, a large proportion of projects in the 2024–2026 rolling plan have multi-year drawdowns of between 5 to 7 years, which are project-tied loans. These projects cut across critical sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fibre optics network across the country, fighter jets for security, and rail and road infrastructure,' Manga stated. He informed that the majority of the proposed borrowing will be sourced from Nigeria's development partners, including the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank, as these institutions offer concessional financing with favourable terms and long repayment periods, thereby supporting Nigeria's development objectives sustainably. The government reiterated that the debt service-to-revenue ratio has started decreasing from its peak of over 90 percent in 2023, and it has ended the distortionary and inflationary ways and means. It highlighted that there are significant revenue expectations from the Nigerian National Petroleum Company Limited (NNPCL), and technology-enabled monitoring and collection of surpluses from Government Owned Enterprises (GOE) and revenue-generating ministries, departments, and agencies, including legacy outstanding dues. 'Having achieved a fair degree of macroeconomic stabilization, the overarching goal of the Federal Government is to pivot the economy onto a path of rapid, sustained, and inclusive economic growth. 'Achieving this vision requires substantial investment in critical sectors such as transportation, energy, infrastructure, and agriculture. These investments will lay the groundwork for long-term economic diversification and encourage private sector participation. 'Our debt strategy is therefore guided not solely by the size of our obligations, but by the utility, sustainability, and economic returns of the borrowing. Ensuring that all borrowed funds are efficiently utilized and directed toward growth-enhancing projects remains a top priority,' the Government further explained. Manga underlined that the government remains committed to keeping borrowing within manageable and sustainable limits in accordance with the DMO Debt Sustainability Framework.
