CBN raises N3trn in two weeks of Treasury Bills Auctions

The Central Bank of Nigeria (CBN) is set to raise N1.05 trillion at a Treasury Bills (NTBs) auction today, March 18, bringing total short-term borrowing by the federal government to nearly N3 trillion within two weeks.

The development was disclosed in an official invitation to tender issued by the apex bank on behalf of the Debt Management Office (DMO) and obtained by Nairametrics.

According to the notice, the auction will follow the Dutch auction system, allowing yields to be determined by investor demand and prevailing liquidity conditions. The latest auction underscores the government’s continued reliance on domestic debt markets amid fiscal pressures.

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What the data is saying

According to the tender notice, the Federal Government will offer N1.05 trillion worth of Treasury Bills across three maturities, with settlement expected the following day.

• A total of N100 billion will be issued in 91-day bills, while N150 billion will be offered in 182-day bills, and N800 billion will be allocated to 364-day instruments, reflecting stronger demand for longer-tenor securities.
• Primary market dealers are required to submit bids electronically via the CBN’s Scripless Securities Settlement System (S4) between 8:00 a.m. and 11:00 a.m., with bids set in multiples of N1,000 and a minimum subscription of N50.001 million.
• Authorized Money Market Dealers can submit multiple bids for themselves and clients, while results will be announced the same day, with successful bidders receiving allotment letters on March 19 and payments due before 11:00 a.m. on settlement day.
• The Dutch auction system to be used allows yields to be determined by investor demand and prevailing liquidity conditions, reinforcing the market-driven nature of the issuance.

More insights

The latest issuance comes amid a broader trend of aggressive short-term borrowing, with the government already raising approximately N2 trillion through NTB auctions earlier this month.

• On March 4, the CBN raised N1.01 trillion at higher rates, with short-term yields increasing to 15.95% from 15.8% and longer maturities rising to 16.73% from 15.9%, while the mid tenor remained unchanged at 16.65%.
• On March 11, another N933.92 billion was raised, with rates largely stable except for a marginal drop in the longer tenor, indicating sustained investor appetite despite elevated yields.
• If the full N1.05 trillion on offer today is allotted, total borrowing through NTBs between March 4 and March 18 will reach exactly N2.99 trillion, highlighting the scale and pace of recent issuances.

Experts say that this pattern suggests persistent fiscal distress amid maturing obligations that must be refinanced, rather than liquidity absorption by the monetary authorities, as well as strong institutional demand for government securities offering relatively high yields.

Expert views

Experts say that while the headline figure suggests a sharp increase in borrowing, the underlying dynamics may be more nuanced and may not entirely reflect new debt accumulation.

• “The first thing to examine is the maturity profile of existing government debt. If the government is raising funds mainly to roll over maturing obligations, then the net impact on total borrowing may not be as significant as it appears,” said Olubunmi Ayokunle, Head of Financial Institutions Ratings at Augusto & Co.
• “When ministries defended their budgets, many complained about delays in the release of capital allocations. That suggests the fiscal situation may not be as strong as initially presented,” he added.
• “This is not routine financing. It is a signal—a signal of pressure, a signal of urgency, a signal of a system stretched,” said Blakey Okwudili Ijezie, convener of Blakey’s National Economic Conference.
• “Interest rates will rise because such volumes cannot be absorbed cheaply. When rates rise, businesses borrow less, expansion slows, and jobs are threatened,” he further noted.

Analysts broadly agree that while Treasury Bills remain a key fiscal tool, the scale and frequency of issuance point to ongoing structural pressures within the economy.

What you should know

The CBN issues these Treasury Bills on behalf of the Federal Government through the Debt Management Office, which manages Nigeria’s growing debt profile amid a widening fiscal deficit.

Nigeria’s 2026 budget is anchored on a fiscal deficit estimated at N20.12 trillion, reflecting a significant gap between projected revenues and planned expenditure.

• Domestic borrowing is expected to account for about N14.30 trillion, representing over 70% of the deficit, underscoring heavy reliance on the local debt market.
• Additional financing sources include external loans, multilateral and bilateral funding, as well as proceeds from privatisation and asset sales to bridge the funding gap.
• The structure of this financing plan raises concerns about rising interest rates and the potential crowding-out of private sector credit as banks increasingly channel funds into risk-free government securities.

The reliance on Treasury Bills and other domestic instruments highlights the government’s ongoing effort to balance deficit financing, liquidity management, and debt sustainability, even as economic pressures persist.

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