Nigeria’s Treasury Bill Rates of 2% And Opportunity for a Startup Nation

Nigeria’s Treasury Bill Rates of 2% And Opportunity for a Startup Nation

Today, the Treasury Bills (TB) rate in Nigeria is about 2%, and Nigerian investors who have typically depended on that fixed income are now forced to take risks on something instead of free “profit” with largely no risk. When TB was near 14%, we all criticized the Central Bank of Nigeria for “de-investing” in Nigeria. Largely, at a high TB rate, most investors would just park their monies in TB, denying startups and companies funding and lending liquidities. Sure, there was that argument that high TB would fight inflation!

Right now, if you are feeling the antenna signals, angel investing has ramped up in Nigeria since TB fell below 6%. And with the news of Paystack acquisition, expect more investors to open their wallets to startups.

The latest data from Nigeria’s Treasury bill auction shows that Nigeria’s 364-day reduced by 2%. On the other hand, Stop rates moderated slightly for the 91-day tenors and 182-day tenors. The 91-day bills had stop rates of 1 % and 182-day bills also went by 1%.

At the auction, the Debt Management Office (DMO) sold N12.76 billion on the 91-day paper, N4.5 billion on the 182-day, and N107.6 billion on the 364-day bill despite huge demand from Investors.

The next thing we need from CBN and the tax agency (FIRS) is to unlock more capital from venture capital, and private equity firms. The goal here is to accelerate access of capital to growing companies in the nation by providing more incentives to investors to take risks on Nigerian companies. I have explained the plan here.

Fixing Nigeria’s Lackluster Venture Capital Funding

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One thought on “Nigeria’s Treasury Bill Rates of 2% And Opportunity for a Startup Nation

  1. We created AMCON to buy bad debts from people who mismanaged finances, with everything added to our national debt!

    In our all knowing posturing, government still doesn’t think it’s wise to pull in the treasury bill, then rechannel it to fund promising start-ups, while guaranteeing investors. All the money we share in the name of one scheme or the other would have been enough to cover losses for investors, rather than funding consumption here.

    As always, poor thinking remains our biggest drawback.

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