Learn Everything About Treasury Bills in Nigeria


This article is a simplified process-led guide set to answer all your questions about treasury bills, otherwise known as “TBills”. How is it booked? What are the dynamics involved in interest pricing? Available tenors? Benefits? Tips? Where can I buy it? Minimum amount? Maximum amount? So Sit tight and learn everything about treasury bills in Nigeria!

What is a Treasury Bill?

what-is-treasury bills

Ok. Treasury bill (also Tbills, TB) is a short term debt obligation owned, backed, and issued by the treasury unit of the Federal Government of Nigeria. Against certain malicious misconceptions in Nigeria, there’s actually no maximum to what you can purchase on T-Bills. However, there’s a minimum buy-able amount – N100,000NGN (one hundred thousand naira only). You know why it’s best you learn everything about treasury bills in Nigeria? Treasury Bills are zero-risk and extremely secure. Ultimately, treasury bills are backed by the Federal Government of Nigeria, and interest is paid upfront.

Understanding How TBills Work

Let me break it down. For instance, the Nigerian Government plans a project e.g a school, a mall, etc with architecture, designs, contracts, locations and every other thing all drawn out. Now, the government requires funds to finance the project. When an investor purchases a T-Bill, funds drop to government’s position. This means the government is practically consenting to an IOU to the investor. Funds invested are, hence, used to finance the project at hand. The government does not fail to pay back, this is why T-Bill is the most conservative way to invest.

The Central Bank of Nigeria sets bidding dates and ultimately auctions T-Bills off using two scales – the competitive, and non-competitive (both regarded as the Primary Markets). However, some existing investors may wish to cash out before maturity and still salvage some interest gains by reselling their security in the Secondary Market. Next bidding date is: 28th November, 2019 as seen below;

Variables Involved in Pricing

The auction, bidding and purchasing process can be affected by certain conditions. Hence, prices fluctuates. Government policies can affect the auctioning and bidding immensely. Volume of bills request by investors and supply by government is also a huge factor, this is capable of destabilizing this debt security’s pricing.


The longer the tenor, the higher the interest. This is very simple, the more time your investment is committed, the higher the returns. Rising market interest rates make the fixed-rate-T-Bills less attrative to investors.



Even if T-Bills are the safest debt security in the market, very few investors tend to buy them when inflation rate over-shoots T-bill return. For instance, if an investor bought a T-Bill with a 4% yield while inflation was at 5%, the investor would have a net loss on the investment when measured in real terms. Hence, T-bill prices tend to fall during inflation as investors re-sell them and opt for higher-yielding ventures.

Market Risk

A volatile economy where recession looms will experience in-flux of investors in T-Bills. This is because T-Bills is seen as a safe haven for their money, since proceeds and principal is fully backed by the government. This practice makes investors quiet down all talks about treasury bills. This is because the practice lower the interest rates.

Purchasing Treasury Bills

To invest in fresh treasury bills, all you need to do is go to your bank, request a treasury bills form, fill and submit. Your bank will then bid on your behalf. In a case you want to buy from a re-seller, you can choose secondary market and ask for the rates-tenor table for that very day. You can notify your account officer to always notify you of the bidding dates so you can make your request before hand. This should be the easiest thing about treasury bills in Nigeria.

Fresh T-Bills in Nigeria are auctioned off every fortnight (every two weeks). The calendar is available in this article. Prices of bills to be issued are determined through a usually-heated bidding process. Bidders can be banks, dealers, individual investors and investment companies. Existing investors who may wish to sell their securities may also re-sell through a broker. A competitive bid sets a price at a discount from the T-bill’s par value, allowing you choose the yield you wish to get from it. Non-competitive bid auctions only permit investors to submit bids to buy a set naira amount of bills.

Treasury Bills Investments Pros and Cons



  • Interest is paid upfront
  • Zero risk as this debt obligation is fully owned, issued and backed by the Federal Republic of Nigeria.
  • Interest gain is NOT taxable. This means you will not be taxed on your proceeds yield.
  • If you have urgent need for your money, you can put your T-bills up for sale through your broker.
  • You can invest with funds as low as N100,000NGN
  • This investment can be used for other purposes, termed ‘cash-backed’ collateral


  • Your money is taken off your account. This means the said funds leaves your bank account, it will not be available for cash-intensive businesses.
  • Because T-bills have no risk, the rates are not competitive (this is still subject to the mood of the market).
1 Comment
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    […] explained in a prior post Learn Everything About Treasury Bills in Nigeria, the Nigerian Treasury Bills have auctioned bills backed by the Nigerian Government and the Central […]

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