April 30, 2026/Cordros Report

The Nigerian fixed income market entered 2026 supported by ample system liquidity, which shaped early trading dynamics. This liquidity backdrop supported a broad-based rally at the start of the year, as market participants positioned ahead of a widely anticipated disinflation driven easing cycle.

Consequently, average yields on Nigerian Treasury Bills and FGN bonds compressed by 70bps and 49bps, respectively, settling at 18.8% and 16.1%. This was broadly in line with our expectations, as we had anticipated that the robust liquidity environment, alongside an aggressive rate cut cycle, would drive yields lower. On this basis, we projected Treasury bills and FGN bond yields to moderate to 13.9% and 14.4%, respectively, by year end 2026. However, the macro backdrop has shifted materially in recent weeks.

Renewed inflationary pressures have moderated our expectations around the pace and quantum of monetary easing by the Monetary Policy Committee and, by extension, our yield expectations. Accordingly, we revise our forecasts and now expect Treasury bills and FGN bond yields to settle at 17.8% and 15.8%, respectively, by year end 2026.