In its latest Treasury bills auction on May 21, 2025, the Central Bank of Nigeria (CBN) raised N615.8 billion, surpassing the N598.3 billion raised earlier in the month. Despite tough fiscal conditions and high interest rates, investor demand for government debt remains strong, especially for instruments with longer tenors. This development reflects Nigeria’s growing reliance on domestic borrowing amid declining government revenues.
The auction saw strong interest in the 91-day bills, with subscriptions of N72.56 billion for an N50 billion offer, leading to an allotment of N71.67 billion at an 18% stop rate. However, the 182-day bills were less attractive, with only N46.84 billion in subscriptions against a N100 billion offer, resulting in an underwhelming 46.8% subscription rate. The CBN allotted N41.13 billion at an 18.5% stop rate for this tenor.
The most significant activity came from the 364-day bills, which were oversubscribed by nearly 300%. The CBN offered N350 billion but received bids worth over N1.052 trillion, ultimately allotting N503 billion at a stop rate of 19.56%. This highlights investor preference for high-yield, longer-duration securities amid uncertain economic conditions and inflationary concerns.
So far in 2025, the CBN has issued nearly N7.896 trillion in T-bills, slightly more than the same period in 2024. However, yields have generally been lower this year, reflecting fluctuations in monetary policy and liquidity levels. The total issuance in 2024 stood at N13.3 trillion, as the government contended with a large budget deficit and significant revenue shortfalls.
With oil prices below budget benchmarks and crude production under target, Nigeria’s revenue outlook remains uncertain. Analysts anticipate increased short-term borrowing to bridge funding gaps, though elevated interest rates pose sustainability challenges. The CBN is expected to continue leveraging T-bills to manage liquidity and support fiscal operations, even as concerns grow about the high cost of debt servicing.
Source: The Sun