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Market note, 31 August 2026. Auction detail is drawn from reporting rather than from the auction papers, so confirm terms with your bank.

The Central Bank is offering 700 billion naira of Treasury Bills on 3 September, one of the final auctions of the third quarter. Most manufacturers read that as a story about government finance and move on. It is worth a minute longer than that, because Treasury yields set the floor under everything a commercial bank will lend you.

How the floor works

A bank can lend to the Federal Government at the Treasury Bill rate with effectively no credit risk. It will not lend to a factory for less than that, and it will add a margin for the risk that a factory carries. So when government borrows heavily and pays well for it, the cheapest money in the market gets more expensive, and every commercial rate above it moves up too. The Monetary Policy Rate currently stands at 26.5 per cent, which tells you roughly where that floor sits.

What manufacturers are already saying

The Manufacturers Association of Nigeria surveyed 400 chief executives across its 14 industrial zones for the second quarter. Around two-thirds described commercial bank lending rates as a major disincentive to productivity. Its confidence index came out at 52.1 points, up from 48.7 in the first quarter, so sentiment improved. But the two conditions named as holding manufacturing back were the same two as before: the cost of borrowing, and unreliable power.

What it means before you commit to a purchase

If you are paying cash, this changes nothing for you directly, though it tells you something about the competitive environment your customers are operating in. If you are financing, the interest is not a footnote to the machine price. Over a five-year facility at rates in this range, the finance cost can approach the cost of the equipment itself. That belongs in the arithmetic at the point you decide what to buy, not after. It also argues for a specific discipline. A smaller machine bought outright, running and earning, is frequently a better position than a larger machine bought on credit and running below capacity while the interest accrues. Capacity that is not sold does not service a loan.

The practical step

Before you commit, get your bank to quote the actual rate and the actual term, and build the monthly obligation into your cost per unit. If the machine cannot service its own finance out of realistic output at realistic prices, the specification or the size is wrong, and it is far cheaper to discover that now.

Working out whether a purchase holds up? We build the full landed cost in naira, itemised, and we will tell you when we think the numbers do not work. Get in touch.