On Wednesday, Nigeria’s one-year treasury bill (T-bill) auction recorded the highest investor interest in 2024, with total bids amounting to ₦2.53 trillion—roughly five times the amount offered. This significant surge in demand was attributed to robust system liquidity.
According to Samuel Gbadebo, a fixed-income investment analyst at CardinalStone, liquidity in the system exceeded ₦800 billion on Wednesday, which may have fueled bidders’ heightened interest.
“Speculative trading seemed to be common among participants, with bids reaching as high as 26.82 percent,” Gbadebo explained, highlighting the aggressive behavior of investors at the auction.
The Monetary Policy Committee (MPC), chaired by Yemi Cardoso, had recently raised interest rates by 25 basis points to 27.50 percent in its sixth hike this year, aiming to curb escalating inflation.
This policy shift has influenced treasury bill yields, which have risen considerably compared to the previous year. However, the one-year T-bill yield at Wednesday’s auction declined from its recent peak of 30.7 percent to 29.75 percent.
This decline aligns with projections from analysts at Meristem, who, in a prior report, predicted a slight decrease due to a reduction in maturing obligations. The maturing obligations were reported at ₦583.26 billion, a 4.51 percent drop from the previous auction size of ₦610.80 billion.
Meristem’s analysis stated, “At the forthcoming auction, we project that stop rates for the offered instruments will remain largely aligned with the levels observed in the previous auction.”
Despite the decline in the one-year T-bill yield, the yields on shorter-term bills remained consistent. The 182-day bill yield stood at 20.39 percent, while the 91-day bill yield remained at 18.86 percent for the fourth consecutive auction.
The remarkable investor interest in the auction underscores the appeal of treasury bills as a low-risk investment option amidst Nigeria’s volatile economic climate. Additionally, the elevated yields continue to attract speculative and conservative investors, offering competitive returns against inflationary pressures.
This trend highlights the delicate balance the Central Bank of Nigeria seeks to maintain between controlling inflation and managing liquidity within the financial system.
FG Rekindle National Addressing Council for Economic Growth, Inclusion
The National Addressing Council (NAC) will be revitalized, and a technical committee will be established to promote financial inclusion, economic development, and national planning as part of the Federal Government’s plans to modernize Nigeria’s addressing system.
Stanley Nkwocha, the Senior Special Assistant to the President on Media & Communications, said in a statement that the NAC made this decision at a pre-meeting on Wednesday at the Presidential Villa.
The statement said in part that a new NAC and a technical committee are scheduled to be established next year to further the nation’s objective on planning, economic, and financial inclusion and guarantee an efficient national addressing system.
According to reports, Vice President Kashim Shettima stressed the value of a standardized national addressing system during the meeting, saying it is necessary to boost urban planning, improve service delivery, and promote economic growth.
Justification For Standardisation
Speaking with stakeholders, VP Shettima emphasized the importance of a systematic approach to addressing decades of infrastructure deficiencies and ineffective address mapping.
“We cannot address the issues of urban planning, service delivery, or even basic navigation unless we construct a system that creates order.
“A strong addressing system is about national development, security, and socioeconomic advancement, not just convenience,” he stated.
He emphasized that the current disorganized addressing system impedes governance, logistics, and financial inclusion for millions of Nigerians.
Most homes in the cities where we live are either randomly or not numbered. This makes address mapping more difficult, damages public confidence in address verification, delays emergency responses, and denies millions of people access to financial services, he said.
Expanding On Previous Initiatives
When the National Addressing System concept was first announced seven years ago, the Vice President recognized the effort that had been made to lay the groundwork.
However, he emphasized that frameworks must give way to practical execution.
“This was not a dream to be buried in dusty drawers or put off indefinitely. Addressing is critical to our goal of creating a 21st-century economy,” VP Shettima remarked.
- He listed the wider advantages of a standardized addressing system, such as better disaster management, dependable emergency response, increased e-commerce, and improved logistics.
- He asserts that the government’s task is to foster a synergy among the federal, state, and local governments rather than assigning tasks to others.
- He went on to say that technological know-how and political will must cooperate for this project to succeed.
Strategic Focus And Presentations
The Nigerian Postal Service (NIPOST) and the National Identity Management Commission (NIMC) presented during the meeting.
- Enhancing the country’s address verification system and building the essential framework for a national addressing database were the main topics of NIMC’s presentation.
- Using cutting-edge geolocation technology to map physical addresses nationwide, NIPOST’s presentation focused on initiatives to align the address database with the national postcode system.
- The significance of this endeavor was underlined in a previous speech by Senator Ibrahim Hassan Hadejia, Deputy Chief of Staff to the President (Office of the Vice President).
- He pointed out that taking advantage of the National Addressing System’s opportunities will hasten the government’s economic growth and inclusivity goal, especially for Nigerians living in rural areas.
What To Note
The National Addressing Council was established in September 2017 by Prof. Yemi Osibajo, the former vice president.
In addition to “ensuring that the Policy is revised as at the time due, to align with the new technologies, Policy objectives, and socio-economic realities,” the Council was tasked with “making guidelines and providing strategic direction for the National Addressing System.”
However, since the end of the last government, the Council has been in a state of unconsciousness.
