In the first two months of 2023, banks’ credits to the government increased by N3.77 trillion.
According to data acquired from the Central Bank of Nigeria, the total government credit increased from N24.66 trillion at the end of December 2022 to N28.43 trillion at the end of February 2023.
According to information provided by the CBN in its “Money and Credit Statistics” report, credit increased from N14.9 trillion at the end of January 2022 to N26.65 trillion in the same period of 2023.
In accordance with information provided by the CBN, Aliyu Sanusi, a member of the Monetary Policy Committee, stated at the meeting in January that rates needed to be tightened in order to temper the effects of election-related spending and the liquidity brought on by the proposed government borrowing in 2023.
He also stated that the FGN’s borrowing from the central bank (93.21%), commercial banks (44.26%), and non-interest banks was one of the main causes of the NDA, which increased by 78.15 percent (y-t-d) in December 2022. (79.13 per cent).
This implies that monetary and fiscal forces have kept playing a significant role in the current inflationary processes, the economist said.
Adeola Adenikinju, a different MPC member, stated: “The World Bank projected Nigeria’s real GDP growth to drop to 2.9% in 2023.
“The effects of flooding, the limited budgetary space, the increase in borrowing rates, security problems, and the moderation in oil prices are the causes of the poor growth.”
