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The short answer
Nigerian Treasury Bills are sold at primary auctions that the CBN runs on behalf of the Debt Management Office, usually every two weeks, in 91-day, 182-day and 364-day tenors. Primary dealers submit bids for themselves and their customers, the CBN accepts bids up to the amount it wants to raise, and publishes a stop rate for each tenor; bills are issued at a discount and repaid at face value.
The basics
| Feature | Nigerian Treasury Bills (NTB) |
|---|---|
| Issuer | Federal Government of Nigeria, through the DMO |
| Auction agent | Central Bank of Nigeria |
| Tenors | 91, 182 and 364 days |
| Frequency | Usually every two weeks, on dates in a published issuance calendar |
| Pricing | Issued at a discount to face value; no coupon |
| Who bids directly | Primary Dealer Market Makers (PDMMs), mainly banks and some discount houses |
| How individuals take part | Through a bank, PDMM, or fund manager acting for them |
| After issue | Traded in the secondary market, mainly on FMDQ |
This page explains the auction itself. For how an individual places an order and what to ask a bank, see how to buy treasury bills in Nigeria.
How an auction runs
- Calendar. The DMO and CBN publish a quarterly calendar listing auction dates and planned amounts by tenor.
- Offer. Ahead of each auction, the CBN announces the amount it will offer in each tenor.
- Bidding. PDMMs collect orders from customers and submit them with their own. Competitive bids state a rate and an amount; non-competitive bids state only an amount and accept the outcome rate.
- Allotment. The CBN ranks competitive bids from the lowest rate upward and accepts them until it reaches the amount it chooses to sell. The highest rate accepted for each tenor is the stop rate.
- Results. The CBN publishes, for each tenor, the amount offered, total subscription, amount sold and stop rate.
- Settlement. Successful bidders pay the discounted price on the settlement date, and bills are credited to their custody accounts.
Reading the results
- Amount offered
- What the CBN planned to sell in that tenor
- Total subscription
- The value of all bids received
- Amount sold (allotted)
- What the CBN actually sold; it can be more or less than the offer
- Stop rate
- The highest discount rate accepted; the headline figure in news reports
- Bid-to-cover
- Subscription divided by amount offered; above 1 means demand exceeded supply
Rates are quoted as discount rates. The CBN results also show the true yield, which is always higher than the discount rate for the same bill, because the discount is calculated on face value but you invest the lower price.
Competitive and non-competitive bids
Institutions that trade actively usually bid competitively, naming the lowest rate they will accept. Many smaller investors placing orders through a bank are entered as non-competitive bids: they accept whatever rate comes out of the auction and, in return, are much more likely to receive their full amount. A competitive bid at a rate above the stop rate is rejected entirely, so a bidder that aims too high gets nothing in that tenor.
Much of each auction refinances bills that are maturing that week, so the amount offered is often close to the value of maturities. When the government sells more than is maturing, it is raising net new borrowing; when it sells less, it is paying down short-term debt.
Pricing: from stop rate to what you pay
For a bill with face value F, discount rate d and t days to maturity, the price is F × (1 − d × t ÷ 365). The true yield is d ÷ (1 − d × t ÷ 365).
Worked example (example figures)
| Step | 364-day bill at an 18% discount rate |
|---|---|
| Face value | ₦1,000,000 |
| Discount | ₦1,000,000 × 0.18 × 364 ÷ 365 = ₦179,507 |
| Price you pay | ₦820,493 |
| Paid back at maturity | ₦1,000,000 |
| True yield | 0.18 ÷ 0.820493 = about 21.94% a year |
Any withholding tax or bank charges reduce what you receive; check how your bank applies them.
A bill bought later in the secondary market is priced the same way, but with the days remaining to maturity and the market rate on the day you buy. If market rates have fallen since the auction, the bill's price will have risen, and the seller makes a gain; if rates have risen, the price falls. Holding a bill to maturity removes that price risk, because you receive the face value whatever the market does.
What moves auction rates
- Monetary policy. A higher MPR, a higher cash reserve ratio and heavy CBN OMO sales tend to lift stop rates. See how the CBN sets interest rates.
- System liquidity. When banks hold a lot of spare naira, for example after FAAC disbursements or maturing bills, demand rises and rates can fall.
- Government funding needs. If the DMO needs more, the CBN may sell above the amount offered and accept higher rates.
- Inflation expectations. Investors want a return that compares well with expected inflation; see real returns.
T-bills vs OMO bills
OMO bills are issued by the CBN itself to drain naira liquidity, not to fund the government. Since an October 2019 CBN directive, individuals and local non-bank companies have been excluded from OMO auctions, which are open to banks and foreign portfolio investors. NTBs remain open to all investors through PDMMs.
| NTB | OMO bill | |
|---|---|---|
| Issuer | Federal Government (DMO) | CBN |
| Purpose | Fund government spending and manage cash | Monetary policy: absorb liquidity |
| Individuals | Yes, through a PDMM or bank | No, under the 2019 directive |
Questions people ask
How often are treasury bills auctioned in Nigeria?
Usually every two weeks, on dates set in a quarterly calendar published by the CBN and DMO.
What is the stop rate?
The highest discount rate the CBN accepts for a tenor at an auction. It is the rate reported in the news for that auction.
What is the difference between discount rate and true yield?
The discount rate is calculated on face value; the true yield is calculated on the price you pay, so it is higher.
Can I buy OMO bills as an individual?
Not at primary auctions. Since an October 2019 CBN directive, OMO auctions are restricted to banks and foreign portfolio investors.
Sources
- Central Bank of Nigeria (CBN): treasury bills auction results · accessed Oct 2026
- Debt Management Office Nigeria (DMO) · accessed Oct 2026
- FMDQ Securities Exchange · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.