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According to the latest report commercial banks in Nigeria brought down its loan to the government by a whopping 73.18%, between February and March 2024. This has forced the government to look into the fixed-income market. In January, government credit totaled N23.52 trillion. Economists suggested that the decline in credit to the public sector in March might be seasonal
In March, there was a lot of government mobilization of funds through the issuance of Treasury bills. And it is cheaper for the government to raise funds through Treasury bills rather than borrowing from banks, stated Olusegun Ajibola, a professor of economics and dean of Caleb University’s College of Postgraduate Studies in Imota, Lagos.
Investors are also more interested in government securities. Foreign investors, who prefer the short end of the market, are interested in investing in government Treasury bills and short-term bonds. So, that provided an alternative borrowing channel for the government, he added. The professor deduced that the government would have to look for other sources to borrow from as the year progresses.
The sharp decline in credit to the public sector between February and March 2024 was insignificant. The one-month sharp decline is not enough to determine a trend. We saw the credit to the government rise in January over December. We saw it rise in February over January. This one-month decline is too little to attach much meaning to it, he added.
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The sharp decline in credit to the public sector between February and March 2024 was insignificant. The one-month sharp decline is not enough to determine a trend. We saw the credit to the government rise in January over December. We saw it rise in February over January. This one-month decline is too little to attach much meaning to it, stated Dr Vincent Nwani a renowned economist. One can just say it may be a seasonal thing. Maybe the government did a lot of auctions through the Debt Management Office, which is usually seasonal, Dr Vincent Nwani added. According to the DMO, the Nigerian Government sold bonds for N1.5 trillion during its auction in February.
