The CBN shaped Nigeria’s 2025 financial landscape with strict policies.
It issued ₦17.59 trillion and absorbed ₦2.87 trillion from the market.
Consequently, it aimed to curb inflation and reduce direct central bank financing.
Moreover, Nairametrics data shows close coordination with the Ministry of Finance.
CBN Tightens Liquidity
At the year’s start, the CBN acted decisively.
From January to March, it issued large debt to absorb excess liquidity.
In March, repayments surged as instruments matured from 2024.
However, issuance slowed by April because market pressures grew.
In June, redemptions exceeded new debt, revealing rollover risks.
This slowdown tested the central bank’s ability to manage liquidity effectively.
Fortunately, the second half brought stability.
From July to October, the CBN maintained issuance within a controlled range.
Then in November, borrowing and repayments nearly matched, signalling careful liquidity management.
Nigeria Debt Hit
Debt became the central focus as Nigeria raised ₦17.6 trillion, exceeding the ₦13 trillion plan.
Shitta-Bey warned that using loans for recurrent spending would backfire.
Instead, borrowing must build productive capacity rather than plug budgetary holes.
Experts at the CMAN symposium echoed the warning and urged fiscal discipline.
Professor Wilfred Iyiegbunwe compared current trends with pre-2005 debt crises.
Read Also: CBN Holds MPR At 27% Amid Inflation Battle
The forum recommended cutting short-term debt, improving project selection, and increasing transparency.
Some analysts see limited private sector crowding out.
Auctions remain oversubscribed, and net borrowing stays modest.
They expect corporate financing to recover in 2026 as funding costs fall.
Moreover, the DMO, not the CBN, now determines borrowing volumes, improving governance.
Market Confidence Holds
Economist Teslim Shitta-Bey said Nigeria now moves away from old habits.
Previously, overdraft financing pushed inflation to 38%.
Now, market-based borrowing provides a safer, long-term solution.
Yet, this approach may raise borrowing costs for businesses.
Nevertheless, investors remain confident despite domestic and global uncertainties.
For example, Nigeria’s Eurobond sale oversubscribed by 300%, showing strong appetite.
Looking ahead, the government will likely continue using domestic debt to manage liquidity.
Investor confidence remains strong due to attractive yields and policy stability.
However, the central question remains: how will the government deploy these funds?
Shitta-Bey emphasised that misallocating debt, not borrowing itself, threatens economic resilience.
