CBN’s loan to FG reached N23trn

To Qingwendu Obieni

Nigerian Continued borrowing puts its economy in jeopardy, as the latest research reveals that the total amount of Nigerian central bank way and means loans to the federal government reached N22.8 trillion as of September 2022 may continue to be exposed.

This comes after data from the bank’s periodicals revealed that way and means lending to the federal government increased by N749 billion in September.

This could be Ways and Means’ largest loan extension to the government in Nigeria’s history.

Economists interviewed by the Daily Sun said loans could continue to rise in the coming months, given the low income from taxes and oil sales, as the new government prepares for a change of government next year. It added that it could pose an economic crisis as it is advancing

Ways and Means is a loan facility for CBN to cover government budget shortfalls.

It also allows the government to borrow from the apex bank when it needs short-term or emergency funds to fund delayed cash earnings of the budget deficit.

When the current government took office in May 2015, the CBN ways and means was about N648 billion.

However, since experiencing significant revenue shortfalls, the federal government has relied heavily on the CBN to fund spending programs through ways and means.

The federal government confirmed it missed its revenue target when it announced its 2022 budget assessment. As of August 2022, the country’s reserve revenue is N4.23 trillion, 64% of the proportional target N6.65 trillion.

On the other hand, the FGN share of oil revenue was N39.506 billion (representing a performance of 27.1%) and non-oil tax revenue totaled N1.549 billion, a performance of 102.9%.

The actual expenditure was N9.56 trillion (N3.5 trillion debt service) against the target of N11.55 trillion.

The government is struggling with revenue, but the budget deficit continues to balloon beyond its proportionate target. According to the government, as of August he had a deficit of N5.33 trillion, which exceeded the pro rata level he N430.82 billion. Borrowing also exceeded his July target by £1.26 trillion.

But an economic analyst, who requested anonymity, said Nigeria borrowed too much because CBN loans were killing the economy.

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