CBN Mobilizes N15.3 Trillion from Treasury Bills to Address 2025 Budget Gap

The Central Bank of Nigeria (CBN) successfully raised an estimated N15.3 trillion from the Nigerian Treasury Bills (NTBs) market in 2025. This initiative aims to support the federal government in addressing its budget deficit. The amount reflects a 14.8 percent increase from the N13.3 trillion mobilized in 2024, highlighting a growing dependence on short-term domestic borrowing to fill fiscal gaps.

Treasury bills are low-risk financial instruments issued by the CBN on behalf of the federal government. They are primarily utilized to meet short-term financing needs. According to data from the CBN, the total amount offered for subscription in 2025 was N12.8 trillion, marking a significant 60.2 percent increase compared to N7.99 trillion in 2024. Despite this higher amount raised, total investor subscriptions decreased, a trend attributed to lower yields.

In 2025, investor subscriptions totaled N36.63 trillion, a 5.5 percent decline from N38.75 trillion in the previous year. Market analysis indicates that the CBN intentionally reduced NTB stop rates during this period, encouraging a reallocation of investment funds, including flows into the Nigerian Stock Market.

Changes in Stop Rates Reflect Market Dynamics

The NTB auction held on December 17, 2025, saw a decline in the stop rate on the 91-day bill to 15.5 percent, down from 18 percent in December 2024. The 182-day bill also experienced a drop, closing at 15.95 percent compared to 18.5 percent the previous year. Similarly, the 364-day bill ended at 17.51 percent, significantly lower than the 22.9 percent recorded in December 2024.

Analysts suggest that the CBN’s approach exemplifies a careful balancing act. By implementing a combination of tight monetary policy alongside large NTB auctions, the apex bank aims to control inflation and stabilize the foreign exchange market. At the same time, it seeks to gradually lower borrowing costs to attract capital inflows.

The variation in stop rates across different maturities reveals much about investor sentiment. The lower yield on the 182-day bill indicates expectations of interest rate stability in the near future, while the higher yield on the 364-day bill signals lingering caution regarding longer-term economic uncertainties. This demand spread across maturities suggests strategic positioning by investors and ongoing confidence in Nigeria’s domestic debt market.

Mr. Tajudeen Olayinka, an investment banker and stockbroker, provided insight into the lower yields, attributing them to demand-and-supply dynamics. He noted that the government’s decision to cut NTB stop rates was intended to attract key institutional investors.

“The essence is to encourage foreign inflows that could help improve dollar liquidity in the foreign exchange market and moderate pressure on the naira until the market attains equilibrium,” Olayinka explained. “I have no doubt that this is the most appropriate decision by the CBN and the government at this time. There is a clear need to improve dollar liquidity, which will eventually lead to a moderation in domestic interest rates.”

As Nigeria navigates its fiscal challenges, the CBN’s actions underscore a proactive approach to managing both domestic and international financial pressures. The reliance on treasury bills highlights the ongoing adjustments within the country’s economic framework, aiming to foster stability and growth in a fluctuating market environment.