A cash real return measures what you actually earn, after inflation, from holding cash or near-cash instruments like Treasury Bills. Venoble's VNG-CRR index tracks this for Nigeria by deflating 91-day T-bill returns by the NBS Consumer Price Index. The result is often sobering: for long stretches, Nigerian cash savers have been losing purchasing power every single month.
The VNG-CRR (Cash Real Return Index) answers a deceptively simple question: if you'd rolled your money into 91-day Nigerian Treasury Bills continuously, and inflation ate away at the proceeds, what would you have left in real terms? The index takes the CBN's 91-day NTB stop rate as the nominal return and deflates it by the NBS headline CPI figure, producing a monthly real return series.
With 205 monthly data points spanning over 17 years, VNG-CRR is the longest continuous measure of Nigerian cash real returns available anywhere. The construction is straightforward, but the data inputs require careful sourcing. The NBS has rebased its CPI series multiple times, most recently to a 2024 base year. VNG-CRR handles these splices to produce a consistent long-run series.
Most Nigerians save in cash or near-cash instruments: savings accounts, fixed deposits, money market funds, or T-bills. This isn't irrational. The stock market feels risky, real estate requires large lump sums, and foreign currency carries its own risks and access problems. Cash feels safe.
But 'safe' is relative. If your T-bill yields 15% and inflation is 30%, you've lost 15% of your purchasing power in a year. Your bank balance went up, but the cost of rice, rent, and school fees went up faster. VNG-CRR makes this visible. It converts the vague feeling that 'things are getting more expensive' into a precise, month-by-month measure of how much real value cash savers are gaining or losing.
VNG-CRR's historical data reveals a clear pattern: real cash returns in Nigeria swing between modestly positive and severely negative, depending on the gap between T-bill rates and inflation. During periods when the CBN raised rates aggressively, like late 2023 and 2024, nominal T-bill yields spiked, but inflation often rose in tandem, keeping real returns near zero or negative.
The most damaging periods for cash savers came when inflation accelerated while T-bill rates stayed suppressed, whether by CBN policy or market conditions. During those stretches, VNG-CRR's index level fell steadily, showing continuous real wealth destruction. The cumulative effect over years is striking: a naira held in T-bills through the wrong decade could lose half its purchasing power.
VNG-CRR serves as the risk-free real rate for Nigeria. Every investment decision implicitly compares the expected return against what cash would earn. If VNG-CRR shows a negative real return, that raises the bar for all other asset classes: equities, bonds, and real estate only need to beat inflation, not cash plus inflation.
For institutional investors, VNG-CRR provides a denominator for real return calculations. Pension funds can measure whether their equity allocation is actually beating the cash alternative in real terms. Fund managers can demonstrate real value-added rather than just nominal gains that might lag T-bills on an after-inflation basis. For retail savers, the message is simpler: VNG-CRR tells you the true cost of holding cash in Nigeria, and that cost is often higher than you think.
It depends on the inflation rate. T-bills are the safest naira-denominated instrument, backed by the Federal Government. But safety of principal doesn't mean safety of purchasing power. Venoble's VNG-CRR index shows that T-bill holders have experienced extended periods of negative real returns, meaning inflation outpaced their yields. T-bills are a reasonable place to park short-term cash, but treating them as a long-term wealth-building strategy has historically been a losing proposition in real terms.
For most savings accounts paying 1% to 4%, the real return is deeply negative when inflation exceeds 25%. Even T-bills, which offer higher nominal yields, have frequently delivered negative real returns. VNG-CRR tracks this precisely: with 205 months of data, it shows that Nigerian cash savers have lost purchasing power more often than they've gained it. The exact figure changes monthly, but the pattern is consistent.
VNG-CRR has 205 monthly data points, covering over 17 years of Nigerian cash real returns. It's built from CBN 91-day NTB stop rates deflated by NBS CPI data, making it the longest continuous cash real return series available for the Nigerian market. The full series is published by Venoble and is available through the VCORE data platform.
VNG-CRR uses the CBN 91-day NTB stop rate exclusively, not bank deposit rates. T-bills represent the true risk-free rate in naira terms since they're backed by the Federal Government. Bank deposit rates are lower and vary between institutions, so they'd produce even worse real returns than what VNG-CRR shows. If your savings are in a bank deposit rather than T-bills, your actual real return is almost certainly lower than the VNG-CRR figure.