The average yield on Nigerian government bonds stabilized at 19.75% in December, as trading activity remained muted ahead of anticipated fresh issuances in 2025. In the secondary market, interest was primarily focused on the February 2031, May 2033, February 2034, and June 2053 bonds.
On the benchmark curve, yields edged higher at the short end (+1 basis point), driven by investors reallocating their portfolios to high-yield assets. The JAN-2026 bond saw minor profit-taking activity (+2 basis points), while yields at the mid and long ends remained stable.
With over ₦7 trillion in bond issuances expected to partially fund the 2025 budget deficit, fixed-income experts recommend a shift toward long-term government bonds, which currently offer coupon yields around 19%.
Investor sentiment at the start of the week was cautious, with moderate sell-offs observed across the yield curve. Pressure was particularly pronounced in the mid-segment, with yields on the Apr-2032 and May-2033 bonds rising to 18.60% and 20.80%, respectively, according to TrustBanc Financial Group.
Despite these movements, the average benchmark yield closed the year unchanged as trading activity wound down on a subdued note.
CardinalStone Limited projects that the Federal Government will borrow approximately ₦9.16 trillion from the domestic market in 2025. Assuming ₦2 trillion is raised through dollar-denominated bonds, the remaining ₦7.16 trillion will likely be divided between Nigerian Treasury Bills (NTBs) and bonds. This volume is lower than the domestic naira-denominated issuances recorded in 2024.
The firm anticipates stable yields in the first half of 2025, with a potential for moderation in the latter half, suggesting a preference for longer-duration investments.
