The Central Bank of Nigeria (CBN) would issue N204.95bn in treasury bills at an auction on July 19, aiming to raise N36.78bn in three-month bills, N39.17bn in six-month paper and N129 billion in one-year bills.

The CBN issues treasury bills twice a month to finance its budget deficit, curb money supply growth and provide an avenue for lenders to manage liquidity.

The economy expects its budget deficit to hit N2.36tn this year as it tries to spend its way out of recession, with more than half the deficit financed through local borrowing.

The Minister of Finance, Mrs. Kemi Adeosun, had on Tuesday said that Nigeria should not borrow more to fund its budget and instead raise the money it needs by other means.

Meanwhile, Adeosun said the Federal Government was planning to issue a 10-year promissory note to offset N2.7tn ($8.85bn) owed to contractors and employees.

The country is in the second year of a recession caused by low crude oil prices and attacks by militants on facilities in the Niger Delta energy hub.

Oil sales account for 70 per cent of government revenues.

Several state governments have raised money on the domestic bond market and from banks to fund infrastructure projects at the peak of oil prices.

But as crude prices plunged, many have found themselves unable to pay bills or salaries.

A total of N2.7tn is outstanding, Adeosun told reporters in the capital, Abuja, after a cabinet meeting. Money is owed to state governments, contractors and oil marketers, she said, as well as power generation and distribution companies.

Some N740bn of pension and salary arrears and N1.93tn of other obligations are also outstanding, including to the Federal Government contractors and suppliers.

Adeosun said the programme required final approval from parliament.