The Central Bank of Nigeria (CBN) has taken a decisive step in asserting full control over the government securities segment of the fixed-income market, activating a new regime that mandates the use of its S4 electronic interface for Treasury Bills (T-Bills) auction submissions.
The move comes with a major N700 billion T-Bills issuances scheduled for Thursday, November 20, 2025, marking the first practical implementation of the apex bank’s earlier policy notice signalling sweeping reforms in the management of government securities.
The directive, which takes effect with the November 20 issuance, is widely viewed by analysts as the clearest indication yet that the CBN is enforcing its plan to directly administer primary market flows in government securities to curb price distortions, eliminate information asymmetry, and deepen auction transparency.
S4 Submission signals end of PDMM-led auction framework
Although the S4 interface has existed since 2014, it has never been activated as the main platform for auction submissions. Until now, the auction process relied on physical or proxy submission of bids through the CBN Issue Office in Lagos, or through Primary Dealer Market Makers (PDMMs), who traditionally collated bids on behalf of brokers, investors and institutions.
However, following concerns raised in its recent circular—which outlined the apex bank’s intention to sanitize the government securities market and neutralize structural vulnerabilities—the CBN is transitioning the entire auction workflow to a centralized, digital, dealer-neutral platform.
“In the past, primary dealers collected bids from investors and physically submitted them to the CBN. This new directive bypasses them completely,” Mr. Tajudeen Olayinka, CEO of Lagos-based Wyoming Capital Partners, told Nairametrics.
The investment expert explained that “It is consistent with the CBN’s earlier signal that it would take charge of the primary segment of fixed-income market where government securities are issued.”
Under the new system, all market participants—including PDMMs—must submit bids directly through the S4 window without any preliminary visibility of competing entries. This automation dismantles long-standing access advantages enjoyed by primary dealers, who previously had sight of both retail and institutional bids before forwarding consolidated schedules to the central bank.
CBN eliminates bid visibility advantage as transparency deepens
Analysts note that the reform dismantles a structural imbalance in which PDMMs could view investor bids and then submit slightly lower rates to secure larger allocations at competitive levels—a practice that often placed individual investors at a disadvantage.
“With S4, no dealer can see what rate others are quoting,” one veteran dealer who pleaded anonymity, stated in an exclusive interview.
“All bids now meet for the first time at the CBN window. This ensures transparency, eliminates collusive behaviour, and protects investors.”
While PDMMs will remain active as market makers in secondary trading, their influence over primary market price discovery has been removed. This aligns with the central bank’s intent, as stated in its recent circular, to “take direct control of its segment of the fixed-income market” and ensure integrity in government securities issuance.
FG to raise N700 billion in new Treasury Bills auction
Against the backdrop of the structural reform, the Federal Government is set to raise N700 billion in a fresh T-Bills auction, one of the largest issuance rounds in recent months.
According to a notice released by the CBN on behalf of the Debt Management Office (DMO), the offer comprises:
- N100 billion in 91-day bills
- N150 billion in 182-day bills
- N450 billion in 364-day bills
The auction will follow the Dutch auction format, enabling successful bidders to pay the marginal rate.
Bids are to be submitted exclusively through the S4 interface between 8:00 a.m. and 11:00 a.m. on Wednesday, November 19, 2025, with each bid required to meet the minimum subscription threshold of N50,001,000 and be quoted in multiples of N1,000.
Dealers may submit multiple entries on behalf of their institutions, clients and members of the public, while the CBN retains full discretion to reject bids deemed inconsistent with prevailing market conditions.
Settlement within 24 hours as CBN prioritises efficiency
Successful bidders will receive allotment letters on Thursday, November 20, with payments due by 11:00 a.m. the same day. Settlement will be effected directly into each dealer’s account with the CBN, ensuring swift processing and timely market stabilisation.
The CBN added that the total amount offered may be adjusted in line with “market realities,” giving the monetary authority flexibility to expand or reduce supply depending on liquidity conditions and investor appetite.
As Nigeria approaches what may become a watershed auction—its first under a fully digital, transparent and dealer-neutral system—analysts say the CBN’s firm hand in the government securities market marks a new chapter in fixed-income operations, one aimed at restoring credibility, fairness and efficiency.
