Investigation reveals that the Federal Government has amassed a staggering sum of N11 trillion through auctions and sales of Treasury bills and saving bonds issuance over the past four months, as uncovered by The PUNCH.
An in-depth analysis of bonds and bills results issued in the first four months of the year by both the Central Bank and the Debt Management Office indicates that the government secured N3.1 trillion in FGN bonds and N7.92 trillion in T-bills between January and April 2024, totaling N11.2 trillion.
These bonds play a pivotal role in the government’s debt management strategy, serving various purposes such as providing investors with a relatively secure investment avenue, aiding in the management of the country’s debt profile, and facilitating efficient fund management.
Treasury bills and FGN bonds are classified as risk-free, theoretically with zero risk, as the government is expected to always fulfill its debt obligations, with the option of printing money if necessary.
In January 2024, the Federal Government raised approximately N418.197 billion from four bonds auctioned, followed by N1.49 trillion from two FGN bond offers issued by the DMO in February, albeit falling short of the N2.5 trillion target.
March 2024 saw the DMO raising N475.67 billion in its bond auction, capitalizing on the current upward trend in rates, while April 2024 witnessed the Federal Government raising N626.8 billion in its FGN bond auction.
The total amount raised was approximately 32 per cent higher than the N475.67 billion raised in the March auction, signaling robust market confidence in the government’s creditworthiness.
Regarding T-bills, a total of N1 trillion was on offer in January, but investor demand oversubscribed, reaching a whopping N2.3 trillion. The one-year bill, offered for N600 billion, attracted a massive N1.8 trillion subscription, of which the central bank sold N908.7 billion.
In March 2024, the DMO sold bills valued at N2.69 trillion across its auctions, marking an increase of N11 billion compared to the value of T-bills sold across auctions in February 2024 (N2.589 trillion).
The CBN also conducted a successful T-Bills auction on April 24, 2024, raising approximately N362.45 billion across various maturities, showcasing the market’s strong appetite for government securities.
This significant amount raised comes amid the government's plans to fund the 2024 budget deficit of N9.18 trillion and settle debts, including Ways and Means Advances.
Approximately N4.83 trillion from the proceeds of Nigerian Treasury Bills and Bonds issued in 2024 has been allocated to settle the Ways and Means Advances from the CBN, as disclosed by the Minister of Finance, Wale Edun.
