The Central Bank of Nigeria (CBN) has raised N15.3 trillion from the Nigerian treasury bills market in 2025 as the federal government intensifies efforts to bridge its budget deficit, according to data obtained from the apex bank.
The amount represents a 15.04 percent increase over the N13.3 trillion raised from investors in 2024, signaling the government’s growing reliance on domestic borrowing to fund its operations and development projects. Treasury bills, which are short-term debt securities, serve as a key instrument for covering budget shortfalls when government revenue falls short of expenditure.
These securities are issued at a discount and bear no interest, with the government repaying investors the full face value at maturity. The instrument has become increasingly important for Nigeria’s fiscal management, particularly as the country grapples with revenue challenges and rising expenditure demands.
Data from the CBN revealed that the total amount offered for subscription in 2025 climbed to N12.8 trillion, representing a substantial 60.2 percent increase from the N7.99 trillion offered in 2024. This significant rise in offerings reflects the government’s heightened borrowing needs to finance the 2025 budget.
However, despite the higher volume raised, the market witnessed a dramatic decline in investor appetite. Total subscriptions in 2025 stood at N36.63 trillion, marking a 76.11 percent decrease from the N38.75 trillion recorded in 2024. Market observers attribute this decline to lower yields, which have made treasury bills less attractive to investors seeking higher returns in an environment marked by inflation and currency depreciation.
The sharp drop in subscriptions suggests that investors are becoming more cautious about government securities, possibly due to concerns about real returns after accounting for inflation. This trend could pose challenges for the government’s future borrowing plans if investor confidence continues to wane.
On November 15, 2025, the CBN moved to strengthen its control over the government securities segment of the fixed-income market. The apex bank announced the activation of a new regime mandating the use of its S4 electronic interface for treasury bills auction submissions. This directive, which took effect with an issuance on November 20, aims to improve transparency and efficiency in the auction process.
The new system is designed to streamline operations and reduce irregularities in the treasury bills market, ensuring that transactions are conducted through a centralized platform under the CBN’s direct oversight. This development is part of broader reforms to modernize Nigeria’s financial market infrastructure and enhance regulatory oversight.
Nigeria’s 2025 budget, approved by the National Assembly, projects a deficit that the government plans to finance through a combination of domestic and external borrowing. The significant reliance on treasury bills underscores the limited revenue generation capacity of the federal government, which continues to struggle with low oil prices, production challenges in the petroleum sector, and weak non-oil revenue collection.
The N15.3 trillion raised through treasury bills represents a critical component of the government’s debt management strategy. While domestic borrowing helps avoid exchange rate risks associated with foreign loans, it also crowds out private sector access to credit and can drive up interest rates in the economy.
The decline in investor subscriptions despite increased government offerings points to potential challenges ahead for Nigeria’s debt management. If the trend continues, the government may need to offer higher yields to attract investors, which would increase the cost of servicing the national debt. Alternatively, the CBN might resort to direct financing of government deficits, a practice that could fuel inflation and put additional pressure on the naira.
