Nigeria’s fixed-income market is offering investors something that has been scarce in recent years – real returns that outpace the inflation rate.
When investment returns beat the inflation rate, investors gain, as the value of their money grows in purchasing power terms, not just in nominal value. This is exactly what the Federal Government bonds and treasury bills now offer investors.
Headline inflation fell to 15.91 per cent in June 2026 from 15.93 per cent in May, halting three straight months of increases, according to the National Bureau of Statistics showed.
The slight decline has been enough to push the yields on some government debt instruments above the inflation rate, allowing investors to preserve and grow their purchasing power after a long period of negative real returns.
the improvement, however, has not extended to all products. The latest FGN Savings Bond, targeted mainly at retail investors, still offers a maximum coupon of 15.716 per cent, leaving it marginally below the prevailing inflation rate.
But higher sovereign borrowing costs have largely driven the return to positive real yields. At the June FGN bond auction, the January 2035 and April 2037 bonds cleared at marginal rates of 18.34 per cent and 18.35 per cent, translating to positive real returns of roughly 244 basis points above June’s inflation rate.
Likewise, the 364-day treasury bill sold at the 15 July auction recorded a stop rate of 17.66 per cent, still remaining ahead of inflation.