Checkout Magazine has learnt that the Federal Government raised a total sum of N11tn through auctions and sales of Treasury bills and saving bonds issuance in four months.
An analysis of bonds and bills results issued this year by the Central Bank and the Debt Management Office showed that the government had raised N3.1trn in FGN bonds and 7.92trn in T-bills between January and April 2024, totalling N11.2trn.
These bonds, being crucial instruments for the government’s debt management strategy, serve multiple purposes, including providing investors with a relatively safe investment option, assisting in managing the country’s debt profile, and facilitating efficient fund management.
Specifically, treasury bills and FGN bonds are classified as risk-free, theoretically zero risk, because the government is assumed to always make good on its debts. If not, they can print money to pay it back.
In January 2024, the Federal Government raised about N418.197bn from the four bonds that were auctioned before realising N1.49tn from two FGN bond offers issued by the DMO in February though below the target of N2.5tn.
In March 2024, the DMO raised about N475.67bn in its March bond option capitalising on the current rally in rising rates while the office disclosed that the Federal Government raised N626.8bn in its April 2024 FGN bond auction.
The amount is about 32 per cent higher than the N475.67bn raised in the March auction indicating high market confidence in the government’s credit.
For T-bills, a total of N1tn was on offer but was oversubscribed as investors staked a whopping N2.3tn in January. The one-year bill on offer for N600bn recorded a massive N1.8tn subscription out of which the central bank sold N908.7bn.
The DMO sold bills valued at N2.69tn across its auctions in March 2024 an increase of N11bn in the value of T-bills sold across auctions in February 2024 (N2.589tn).
The CBN also conducted a successful T-Bills auction on April 24, 2024, where about N362.45bn was raised across various maturities. This outcome demonstrates the market’s appetite for government securities.
The raised amount came amidst plans by the government to fund the 2024 budget deficit of N9.18tn and offset debts to settle the Ways and Means Advances.
