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Debt crisis as Federal Government to borrow money from CBN

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The Nigerian government has no plans to stop borrowing from the Central Bank of Nigeria (CBN), as its debts to the bank climbed to N695 billion last month.

BusinessDay data from the CBN shows that the federal government borrowed N3.15 trillion from the CBN in seven months at the end of July.

There have been outcries from several quarters, including the World Bank and the International Monetary Fund (IMF), over Nigeria’s excessive borrowings from the apex bank.

According to the Debt Management Office, the CBN is not listed as a creditor to the Nigerian government as public debt stock increased by N20.04 trillion in the first quarter of 2022 to stand at N41.60 trillion.

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The World Bank, in its Nigeria Development Update (NDU) report, said that in the face of heightened risks, the government had kept a ‘business-as-usual’ attitude that stopped prospects for economic growth and job creation.

The international lender stated that funding the fiscal deficit and trade inhibitions of Nigeria’s apex bank have continued to fuel inflationary pressures in the country.

Inflation had spiked to 19.64 per cent in the latest figures released in July, which is the highest in 17 years and undercut purchasing power of the Nigerian public.

CBN loans to the Nigerian government via the Ways and Means Advance increased by N4.34 trillion last year to N17.45 trillion in December.

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Ways and Means Advances is a facility the CBN uses to fund the government in periods of interim budget shortfalls subject to limits allowed by the law.

Under Buhari, the Nigerian government has obtained about N19.82 trillion since he became president in 2015.

Before Buhari, total CBN loans to the federal government from CBN stood at N789.67 billion, while claims on the CBN were N1.48 trillion and liabilities to the Nigerian government were N2.01 trillion.
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