Nigeria's 10-year bond yield rises to 17.05% as US and African benchmarks fall

Nigeria's 10-year government bond yield rose 46 basis points to 17.05% in the week ended October 16, 2026, even as benchmark yields in the United States, South Africa, Kenya and three other markets declined. The Financial Markets Dealers Association (FMDA) weekly market report showed Nigeria recording the only yield increase among seven countries tracked.

Nigeria defies global decline

The yield rose from 16.59% to 17.05%. The United States recorded a 17-basis-point decline in its 10-year yield to 5.08%. South Africa's equivalent yield fell 11 basis points to 8.86%. Kenya's 10-year yield declined six basis points to 12.53%. Japan's benchmark yield fell eight basis points to 2.94%. The United Kingdom recorded a four-basis-point decline to 5.40%. China's 10-year yield also declined four basis points to 1.64%.

Nigeria's 10-year yield stood approximately 1,197 basis points above the US benchmark. The gap does not represent a guaranteed excess return because it excludes currency movements, inflation and credit risks.

DMO accepts higher stop rates

The upward pressure continued at the October 19 Federal Government bond auction. The Debt Management Office (DMO) allotted N1.22 trillion through competitive bids, about 63.5% above the N748.64 billion allotted in September. An additional N800 billion in non-competitive allotments raised the total to N2.02 trillion.

The September 2036 bond's stop rate increased 50 basis points to 17.29%. The June 2038 bond's stop rate rose 34 basis points to 17.19%. Total auction subscriptions increased by approximately 17% compared with N1.49 trillion in September. The October auction formed part of a N5.75 trillion fourth-quarter bond issuance programme.

The Treasury bill market showed similar pressure. At the October 14 auction, the DMO allotted N220 billion from N982.21 billion in subscriptions for the one-year Treasury bill. The one-year stop rate increased to 15.90% from 15.85%, its first increase since August.

Liquidity rises amid bond supply

Banking system liquidity rose 69.39% to N6.28 trillion in the week ended October 16, supported by N2.41 trillion in maturing Open Market Operation bills. Average FGN bond yields increased 32 basis points to 16.43%. Average Treasury bill yields rose seven basis points to 18.23%.

The CBN recorded a N2.06 trillion primary-market repayment on October 20. Banks subsequently recorded N5.46 trillion in activity at the CBN's Standing Lending Facility window. The DMO's fourth-quarter issuance programme includes planned bond auctions of N2 trillion each on November 16 and December 14.

Separate market headlines during the period included the NGX clawing back N410 billion after Monday's N1.47 trillion wipeout and mutual fund assets nearing N10 trillion as money market funds dominate. The SEC also introduced a National Savings Scheme to widen capital market participation.

For fixed-income investors, rising market yields generally lower prices of existing fixed-rate bonds. New buyers may get higher available yields. The next two DMO auctions will show whether the government is willing to borrow at prevailing higher rates or moderate them.