By Boluwatife Oshadiya | August 26, 2026
Key Points
- CBN expands primary and secondary OMO access to individuals, corporates and non-bank financial institutions through deposit money banks
- Investors submitted ₦4.93 trillion for ₦600 billion of OMO bills offered on August 13, with the CBN allotting ₦2.60 trillion
- OMO yields above 20% could increase competition for investor funds and raise the return threshold for Nigerian equities
Main Story
The Central Bank of Nigeria (CBN) has reopened access to Open Market Operations (OMO) securities for individuals, corporates and non-bank financial institutions, creating a higher-yielding alternative to equities and other naira assets.
The policy, contained in a circular dated August 12, 2026, allows eligible investors to participate in both the primary and secondary OMO markets through deposit money banks. The move reverses restrictions introduced in 2019 and gives a broader group of domestic investors access to one of the CBN’s key liquidity-management instruments.
The policy change has coincided with strong demand for OMO bills. At the CBN’s August 13 auction, investors submitted ₦4.93 trillion in bids against an initial offer of ₦600 billion. The apex bank subsequently allotted ₦2.60 trillion.
The 103-day OMO bill cleared at a 20.39% stop rate, while the 138-day instrument recorded a 20.01% yield. By comparison, Treasury bills sold at the August 12 auction cleared at 16.30% for 91 days, 16.50% for 182 days and 17.59% for 364 days.
The yield gap has raised concerns about competition for domestic investment capital, particularly as Nigerian equities have recently experienced weaker momentum. The NGX All-Share Index fell 1.35% week-on-week in the week ended August 21, according to Proshare Research.
However, the market weakness cannot be attributed solely to the OMO reopening. Profit-taking, valuations, corporate earnings, foreign-exchange conditions and broader investor positioning also influence equity prices.
What’s Being Said
“The volume, tenor and frequency of OMO issuances shall continue to be determined by the CBN in line with prevailing liquidity conditions and monetary policy objectives,” the Central Bank of Nigeria said in its revised OMO framework.
“For investors, the implication is that some funds previously allocated to deposits, treasury bills and other money-market instruments could be redirected towards OMO securities,” said Ike Ibeabuchi, an emerging markets analyst. He added that the development could raise the return threshold for equities, particularly stocks with weak earnings growth or low dividend yields.
What’s Next
The CBN retains control over the volume, tenor and frequency of OMO issuances, meaning future auction sizes and yields will remain important indicators of the policy’s effect on liquidity and asset allocation.
Investors will also watch whether the elevated OMO yields persist as participation broadens and whether funds begin moving more visibly from equities into fixed income.
Bottom Line
The Bottom Line: The OMO reopening gives Nigerian investors another high-yielding avenue for deploying naira and increases competition for capital across asset classes. Its biggest impact on equities may be selective rather than broad-based, with companies needing stronger earnings and dividend prospects to justify the additional risk of holding stocks.
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