Treasury borrowed N6tr from CBN in 2022, besides N17.46tr in 2021
By Jeph Ajobaju, Chief Copy Editor
A total N6.07 trillion was borrowed by the treasury from the Central Bank of Nigeria (CBN) through Ways and Means Advances in 2022 alone, as gleaned from data compiled by the apex bank.
This hiked the federal government’s borrowing from the CBN from N17.46 trillion in 2021 to N23.53 trillion in 2022.
But the government might have borrowed more than N6.07 trillion as the debt was N23.77 trillion in October 2022, according to The PUNCH.
The National Assembly (NASS) recently approved the restructuring of CBN Ways and Means Advances, which adds to the debt.
Ways and Means provision allows the government to borrow from the CBN if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
Since the government started experiencing a significant shortfall in revenue, it has relied heavily on the CBN to finance expenditure through Ways and Means, repaid with securities such as treasury bills and bonds issuance.
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Criticism of excessive borrowing
Economists, the Nigeria Employers’ Consultative Association and opposition parties took a swipe at former President Muhammadu Buhari and the NASS over N22.7 trillion extra-budgetary spending approved by lawmakers.
Groups including NECA and the Lagos Chambers of Commerce and Industry (LCCI) questioned the rationale for the loan by an administration near its exit, and economists described the approval as unusual.
The N22.7 trillion CBN loan increased Nigeria’s debt to N68.95 trillion.
The Debt Management Office (DMO) recently confirmed total public debt rose to N46.25 trillion in the fourth quarter of 2022 (Q1 2022).
It explained the amount comprises domestic and external debts of the federal government, the 36 states, and the Federal Capital Territory (FCT).
Senate Leader Ibrahim Gobir, who led the Senate in the debate for the approval of the Ways and Means loan, explained part of the money was given as loans to states.
Gobir explained the Senate set up the Special Committee to scrutinise the fiscal document and submit a report after analysis and review of submissions made by the Ministry of Finance, Budget, and National Planning and the CBN.
He said the Senate approved N819.54 billion from the N1 trillion additional request made by Buhari, leaving a balance of N180.4 billion being the accrued interest on the sum.