Nigeria's FGN Securities Yield Positive Real Returns

The Federal Government of Nigeria's securities are currently providing positive real returns to investors, as inflation rates have decreased. The headline inflation fell to 15.91% in June 2026 from 15.93% in May, according to the National Bureau of Statistics.

This slight decline has allowed government debt instruments to yield returns above inflation, enabling investors to preserve and grow their purchasing power. The FGN bond auction for January 2035 and April 2037 bonds showed yields of 18.34% and 18.35%, translating to a positive real return of approximately 244 basis points above June's inflation rate.

Additionally, the 364-day treasury bills sold at a record stop rate of 17.66% on July 15, 2023, indicating strong investor appetite. The turnover for treasury bills increased by 137.49% to N1.51 trillion, while FGN bond turnover climbed by 75.91% to N1.20 trillion by June 19.

Experts like Ik Ibeabuchi and Razia Khan suggest that while current returns are attractive, they may be temporary due to potential inflationary pressures from rising energy prices.