FG borrowed N6tn from CBN in 2022 – Report
According to latest data from the Central Bank of Nigeria, the Federal Government borrowed N6.07 trillion from the apex bank through Ways and Means Advances in 2022.
The Federal Government’s borrowing from the CBN increased from N17.46tn in December 2021 to N23.53tn in December 2022 as a result.
The Federal Government may have borrowed more than N6.07 trillion because the national debt was N23.77 trillion in October 2022.
It appears that debt payments may have decreased it marginally to N23.53tn by December.
The Senate and House of Representatives recently accepted the President’s proposal for Ways and Means Advances restructuring, which increases to the existing debt stock.
The Ways and Means clause authorises the government to borrow from the central bank in the event that it need short-term or emergency funding to support delayed government expected cash receipts and fiscal imbalances.
Since the government began experiencing substantial revenue shortfalls, it has depended primarily on the central bank to finance its expenditure plans through Ways and Means.
The federal government had stated that it would repay the loan through the issuing of securities such as treasury bills and bonds.
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Prominent economists, the Nigeria Employers’ Consultative Association, and opposition parties attacked the President, Major General Muhammadu Buhari (retd. ), and the National Assembly over the government’s approval of over N22.7 trillion in extra-budgetary spending by the legislative chambers.
While groups such as NECA and the Lagos Chambers of Commerce and Industry questioned the justification for the loan by an administration on its way out, analysts viewed the Senate’s acceptance as exceptional.
With the Senate’s confirmation of the CBN’s N22.7tn loan to the Federal Government under its Ways and Means clause, Nigeria’s total debt will grow to N68.95tn.
According to the Debt Management Office, Nigeria’s entire public debt stock would reach N46.25 trillion in the fourth quarter of 2022.
It said that the amount included the Federal Government’s domestic and external total debt stocks as well as the sub-national governments (36 state governments and the Federal Capital Territory).
The Senate Leader, Ibrahim Gobir, who led the Senate in the Ways and Means discussion, indicated that some of the money was given to states as loans.
Gobir went on to say that the Red Chamber formed the Special Committee to scrutinise the fiscal document and publish the report after careful analysis and evaluation of comments from the Federal Ministry of Finance, Budget, and National Planning and the CBN.
He stated that the Senate approved the sum of N819.54 billion from the President’s N1 trillion supplementary request, leaving an outstanding balance of N180.4 billion as interest on the total.