The Central Bank of Nigeria (CBN) has reopened its Open Market Operations (OMO) securities to individuals, companies and non-bank financial institutions, creating a new investment avenue for domestic investors and potentially intensifying competition for funds across Nigeria’s financial markets.

Under a circular issued on August 12, 2026, the apex bank authorised individuals, corporates and non-bank financial institutions to participate in both the primary and secondary OMO markets through Deposit Money Banks.

The policy reverses a major restriction introduced in 2019, when access to OMO securities was largely limited to banks and institutional investors.

The move comes as investors continue to show strong appetite for high-yielding short-term fixed-income instruments, raising questions about whether OMO could attract funds that might otherwise flow into equities on the Nigerian Exchange (NGX).

OMO securities are among the instruments the CBN uses to manage liquidity in the financial system. By selling OMO bills, the apex bank can absorb excess naira liquidity and influence monetary conditions.

Unlike Treasury Bills, which represent Federal Government borrowing and help finance government expenditure, OMO securities are primarily monetary policy instruments issued to regulate liquidity.

For investors, however, both instruments compete for the same pool of capital because they offer relatively low-risk, short-term investment opportunities.

At the August 12 Treasury Bills auction, investors submitted about N4.4 trillion in bids for N700 billion on offer. The 91-day bill cleared at 16.30 per cent, the 182-day instrument at 16.50 per cent, while the 364-day bill closed at 17.59 per cent.

A day later, investors submitted another N4.93 trillion for N600 billion of OMO securities. The 103-day OMO bill cleared at 20.39 per cent, while the 138-day instrument was allotted at 20.01 per cent. The CBN eventually allotted about N2.60 trillion.

The yields represented a premium of roughly 3.5 to four percentage points over comparable Treasury Bills, making OMO particularly attractive to investors seeking short-term returns.

Head of Investment Banking at STL Capital & Advisory Limited, Israel Adebomi, said increased demand would not necessarily result in a sharp decline in OMO yields.

“The immediate impact should be stronger demand for OMO, but not necessarily lower OMO yields,” he said, identifying the CBN’s monetary and liquidity stance and the volume of securities supplied as key determinants of yields.

However, Isaac Osaro, Head of Investment Research at First Securities Brokers Limited, expects broader participation to put downward pressure on yields as more investors compete for the securities.

Osaro noted that while a fixed-income return of between 15 and 18 per cent could appear attractive, equities can generate significantly higher total returns through a combination of dividends and capital appreciation.

He argued that OMO would likely become another portfolio option rather than a direct substitute for stocks.

The reopening of OMO therefore could make stock selection increasingly important, potentially separating fundamentally strong companies from weaker counters on the NGX rather than triggering a wholesale flight from equities.