Recent data report from the Central Bank of Nigeria (CBN) has revealed that the Nigerian government under former President Muhammadu Buhari borrowed the sum of N6.07 trillion from the apex bank through Ways and Means Advances in 2022.
The 2022 N6.07 trillion borrowed from the bank pushed the Nigerian government’s borrowing from the CBN from N17.46 trillion in December 2021 to N23.53 trillion in December 2022.
The Nigerian government might have borrowed more than N6.07trillion as the debt was N23.77trillion in October 2022, but noted that servicing of the debt might have reduced it slightly to N23.53trillion by December of the same year under review.
Recall that the Senate and the House of Representatives recently approved former President Buhari’s request for Ways and Means Advances restructuring, which then added to the existing debt stock.
It could be noted that the Ways and Means provision allowed the government to borrow from the apex bank if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
It was observed that since the Nigerian government started experiencing a significant shortfall in revenue, it has relied heavily on the central bank to finance its expenditure programmes via Ways and Means.
Former President Buhari’s government had said it would repay the loan with securities such as treasury bills and bonds issuance, but prominent economists, Nigeria Employers’ Consultative Association and opposition parties took a swipe at Buhari and the National Assembly over the government’s over N22.7 trillion extra-budgetary spending approved by the lawmakers.
The Punch reports that while groups including NECA and the Lagos Chambers of Commerce and Industry questioned the rationale for the loan by a regime that was approaching its exit, economists described the approval by the Senate as unusual.
With the approval by the Senate of the N22.7tn loan from the CBN extended to the Nigerian government under its Ways and Means provision, Nigeria’s total debt will rise to N68.95tn.
Commenting on Nigeria’s debt status, the Debt Management Office (DMO) recently revealed that Nigeria’s total public debt stock increased to N46.25 trillion in the fourth quarter of 2022, noting that the figure consisted of the domestic and external total debt stocks of the Nigerian government and the sub-national governments consisting of the 36 state governments and the Federal Capital Territory (FCT).
Ibrahim Gobir, the Senate Leader who led the Senate in the debate for the approval of the Ways and Means, explained that part of the money was given as loans to states, adding that the Special Committee was set up by the Senate to scrutinize the fiscal document and put up the report after critical analysis and review of submissions made by the Federal Ministry of Finance, Budget, and National Planning and the CBN.
According to Gobir, the Senate approved the sum of N819.54bn from the N1tn additional request made by the President, leaving an outstanding balance of N180.4bn being the accrued interest on the sum.