A Crash Course On Treasury Bills In The Nigerian Market💰🤑🚀🚀

Achalugo don’t you think its high time you have a proper investment portfolio?🤔

I’m definitely not about checking charts every morning or reading long financial reports just to make a little money. If that sounds like you too, then Treasury Bills might just be your perfect match.

You want your money to grow quietly and safely while you go about your day. No stress, no surprises, no “buy!” or “sell” like you're on the trading floor to get more returns. Just simple, steady returns, backed by the Nigerian government.

Market Overview:

The Nigerian Treasury Bill market continues to be a focal point for investors seeking relatively low-risk, short-term investment options. Recent trading sessions have shown varied activity, influenced by several macroeconomic factors, including inflation rates, monetary policy announcements by the Central Bank of Nigeria (CBN), and overall market liquidity.

What are Treasury bills?

Treasury Bills (T-bills) in Nigeria are short-term debt instruments issued and backed by the Central Bank of Nigeria (CBN) on behalf of the federal government to finance short-term government expenditures and control money supply.

They are considered safe, low-risk investments and are popular among both retail and institutional investors, you’re not just saving, you’re earning guaranteed interest while the government uses your money for short-term spending.

How to Invest in Treasury Bills in Nigeria:

There are two main markets where you can purchase T-Bills:

1. Secondary Market: This is where already-issued T-Bills are traded between investors before their maturity date.

• Minimum Investment: The minimum investment in the secondary market is generally lower, often starting from ₦100,000 and in multiples of ₦10,000 thereafter. Some platforms might even allow lower entry points through pooled investments

2. Primary Market: This is where new T-Bills are issued directly by the Central Bank of Nigeria (CBN). Auctions typically happen every two weeks (usually on Wednesdays).

Minimum Investment: The minimum investment in the primary market is usually quite high, typically ₦50,001,000.

How to Participate:

You would typically need to go through a commercial bank or a discount house that acts as an authorized dealer.

Rates: The rates in the primary market are determined by the bids submitted by investors and the CBN's stop rate. These rates can vary at each auction. Longer tenors (e.g., 364-day) often have slightly higher rates than shorter tenors (e.g., 91-day, 182-day).

• They will help you submit your bid to the CBN.

Investment Houses for Secondary & Primary Market T-Bill Investment:

Commercial Banks: Most commercial banks in Nigeria have treasury departments that facilitate the buying and selling of T-Bills in the secondary market. Examples include:

• GTBank

• Zenith Bank

• Access Bank

• Stanbic IBTC Bank

• United Bank for Africa (UBA)

• First Bank of Nigeria

• Sterling Bank

• Fidelity Bank

• Union Bank

How to Get Rates: Contact their treasury departments directly, visit their branches, or check their online trading platforms (if available).

2. Investment Firms/Stockbrokers: These firms are authorized dealers and can execute T-Bill transactions on your behalf in the secondary market. Examples include:

• FBNQuest Merchant Bank

• Meristem Securities

• ARM Securities

• Chapel Hill Denham

• CSL Stockbrokers

• Stanbic IBTC Stockbrokers

• Securities Limited

• Cardinal Stone Securities Limited

• GTI Securities Limited

• FSDH Capital

Many others (refer to the Securities and Exchange Commission (SEC) Nigeria's list of Capital Market Operators for a comprehensive list).

How to Get Rates: Contact their fixed-income desks or check their online trading platforms. Some may require you to have an existing investment account with them.

3. Digital Investment Platforms (Fintech Apps): These platforms often provide easier access to the secondary market with lower minimum investments by pooling funds from multiple investors. Examples include:

• Zedcrest Wealth

• Cowrywise (allows investment in money market mutual funds that hold T-Bills)

• Bamboo

• Risevest (offers access to fixed-income investments) (Note: The Securities and Exchange Commission (SEC) has previously issued alerts regarding Risevest's registration status, so exercise caution and verify their current regulatory compliance.)

As of today, Monday, April 7, 2025, specific live secondary market rates offered by various investment houses are not readily available without checking their individual platforms or contacting them directly. However, based on recent trends and news:

Key Features of Nigerian Treasury Bills:

1. Tenors Available:

• 91 days (3 months)

• 182 days (6 months)

• 364 days (1 year)

2. How They Work:

• T-bills are sold at a discount to face value.

• You pay less than the face value upfront and receive the full face value at maturity.

• The difference is your interest (profit).

For example, you might pay ₦85,000 for a ₦100,000 T-bill with a 91-day maturity. You earn ₦15,000 in interest.

3. Minimum Investment:

• Traditionally, the minimum is ₦50 million for direct bids at the CBN auction.

• But individuals can invest with as little as ₦10,000 – ₦100,000through banks or stockbrokers (indirectly via the secondary market).

4. How to buy

• Primary market: Through the CBN via auctions (mostly for big investors).

• Secondary market: Through banks, brokers, or fintech platforms.

5. Returns:

• Vary based on market demand, inflation, and monetary policy.

• As of early 2025, rates have ranged between 8% and 17%depending on tenor and auction.

6. Tax:

• Interest earned is tax-free in Nigeria, making T-bills more attractive than some other investments.

Recent Auction Trends: News from around mid-March 2025 indicated some upward pressure on yields, particularly for the one-year (364-day) bill, potentially due to liquidity conditions.

General Rate Levels: In the recent past (early 2025), stop rates at primary auctions for the 364-day bills have been in the range of 20%. Shorter tenors like 91-day and 182-day might have slightly lower rates, around the 17-19%range. However, these are indicative and subject to change.

Where to Find Current T-bills Rates:

• Central Bank of Nigeria (CBN) Website: After each primary market auction (usually bi-weekly), the CBN publishes the results, including the stop rates for the different tenors.

• Commercial Banks and Investment Firms: Their treasury departments or online platforms will usually display the current secondary market rates for various T-Bill tenors. You'll need to contact them directly or check their platforms.

• Financial News Outlets: Websites like BusinessDay and Nairametrics often report on the outcomes of T-Bill auctions and secondary market activities, including prevailing rates.

Steps to Take:

1. Determine Your Investment Amount and Horizon: How much do you want to invest and for how long (91 days, 182 days, 364 days)?

2. Choose Your Access Point:

   If you have a large amount (₦50 million+), consider participating in the primary market through a bank or discount house.

3. If you have a smaller amount, explore the secondary market through your bank, an investment firm, or a reputable digital investment platform.

3. Open an Account: You'll need to open an investment account with the institution you choose. This usually involves providing identification and other documentation.

4. Fund Your Account: Deposit the funds you wish to invest.

5. Make your placement:

   • Primary Market: Your bank/dealer will help you place a bid at the auction.

   • Secondary Market: You can place an order to buy T-Bills of a specific tenor at the prevailing market rate.

6. Monitor Your Investment: Keep track of your T-Bills and their maturity dates.

Important Considerations:

• Due Diligence: Always research any investment house or platform before investing. Ensure they are duly registered and regulated by the appropriate authorities (e.g., the Securities and Exchange Commission - SEC).

• Fees and Charges: Be aware of any transaction fees, brokerage fees, or custody fees that may apply.

• Market Risks: While T-Bills are low-risk in terms of default, their secondary market prices can be affected by interest rate movements. If you need to sell before maturity, you might not get the exact yield you initially expected.

• Inflation: Consider the impact of inflation on your real returns. While T-Bills offer relatively stable nominal returns, high inflation can erode the purchasing power of your earnings.

🧠 Pro Tip: if you’re holding a lot of cash or waiting for the right time to enter riskier markets (like stocks), placing your funds in T-bills can help you earn in the meantime.

Signing out… “from mustard seed to big gains”