2023 Treasury Bill Triumph: Federal Government Raises N6.658 Trillion

In a remarkable turn of events, the Federal Government of Nigeria has successfully raised approximately N6.658 trillion through the issuance of Nigerian Treasury Bills (NT-Bills) in the year 2023. This staggering figure signifies a momentous 40.4% surge compared to the N4.74 trillion accumulated through NT-Bills in the preceding year of 2022.

**Monthly Breakdown of NT-Bills Issuance**

Breaking down the data, as meticulously tracked by Infostride News based on Central Bank of Nigeria (CBN) data, the total NT-bills subscription for the year 2023 amounted to a substantial N23.507 trillion. The monthly breakdown illustrates the financial dynamics at play:

– **January:** N277.468 billion raised through two auctions on January 11 and January 25.
– **February:** N680.566 billion raised in auctions on February 8 and February 22.
– **March:** N631.838 billion raised in auctions on March 8, 15, and 29.
– **April:** N281.099 billion garnered through auctions on April 12 and 26.
– **May:** N324.428 billion obtained from auctions on May 10 and 24.
– **June:** N404.509 billion raised in auctions on June 7, 14, and 30.
– **July:** N406.099 billion accumulated through auctions on July 12 and 26.
– **August:** N457.204 billion raised in auctions on August 9 and 23.
– **September:** N544.059 billion obtained from auctions on September 6, 13, and 28.
– **October:** N406.896 billion garnered through auctions on October 11 and 25.
– **November:** A substantial N1.059 trillion raised in auctions on November 8 and 22.
– **December:** N1.185 trillion acquired in auctions on December 6, 13, and 27.

**Analyzing the Treasury Bills Phenomenon**

Theoretically, treasury bills serve as short-term government-backed securities issued by the Central Bank, serving both as a means to raise funds and a tool for monetary policy to control inflationary pressures. However, the current scenario in Nigeria presents a contrasting picture, as the government achieves its highest-ever treasury bill earnings concurrently with the highest inflation rate since 2005.

Attempting to unravel this economic paradox, a banking expert noted, “Our inflation rate is caused by the exchange rate, so no amount of monetary policy can affect inflation.” Echoing this sentiment, Dr. Muda Yusuf, the Director General of the Centre for the Promotion of Private Enterprises, added, “Summarily, the impact of monetary policy on inflation right now is very minimal.”

While treasury bills are typically employed to mop up excess liquidity and influence the demand side of inflation, the Nigerian situation seems to defy conventional economic theories. Dr. Muda Yusuf pointed out, “If you compare these treasury bills to the injection of Ways and Means financing in the economy, the gap is still very huge.” He emphasized, “The rate of liquidity growth emanating from Ways and Means is much higher than the treasury bills we’re talking about.”

**Foreign Portfolio Investors and Market Dynamics**

In the intricate interplay between the funds raised from NT-Bills, the inflation rate, and the prevailing exchange rate, it becomes apparent that foreign portfolio investors have played a significant role, especially in the latter months of the year. According to data from the NGX (formerly the Nigerian Stock Exchange), foreign portfolio participation surged to 23.74% in November, marking the highest recorded level in 2023.

This uptick in foreign investor confidence in Naira-denominated securities can be attributed to concerted efforts by the Yemi Cardoso-led CBN to address foreign exchange backlogs and stabilize the exchange rate in alignment with market realities. The increased optimism in local treasury bills further underscores the evolving landscape of Nigeria’s financial markets.

As the fiscal year concludes, the confluence of unprecedented treasury bill issuances, inflation challenges, and foreign investor participation paints a complex picture of Nigeria’s economic landscape, raising pertinent questions about the sustainability and long-term implications of these fiscal trends. Infostride News will continue to monitor and report on these developments as they unfold, providing in-depth analysis and insights into the evolving financial dynamics of the nation.