Demand for Nigerian Treasury Bills has surged by more than 400 percent in recent auctions, reflecting a flight to safer government securities as businesses struggle with limited access to affordable credit.
Financial market data show that investors, including banks and institutional funds, are increasingly channeling funds into short term government debt instruments due to their relatively attractive yields and lower risk compared to private sector lending.
However, the trend has raised concerns among manufacturers who say the shift is worsening an already tight credit environment. Many firms report difficulty securing loans for expansion, raw material purchases and working capital, citing high interest rates and stricter lending conditions.
Economists explain that when banks prefer investing in government securities rather than lending to businesses, it can crowd out the private sector. This dynamic may slow industrial growth, reduce job creation and dampen overall economic activity.
Manufacturers’ associations have called on monetary authorities to implement policies that encourage more lending to the real sector. They argue that while Treasury Bills help government finance deficits, excessive reliance on them can stifle productive investment.
The Central Bank has previously introduced intervention funds and targeted credit schemes, but stakeholders say access remains uneven and often insufficient to meet industry needs.
Market analysts expect demand for government securities to remain strong in the short term, especially amid economic uncertainty. They caution that balancing fiscal financing needs with private sector credit growth will be crucial to sustaining economic recovery.
