- The Nigerian government has borrowed about N2.45 trillion from the Central Bank of Nigeria through the Ways and Means Advancement
- According to data obtained from the CBN, the Nigerian government got about N17.40 trillion in 2021 and N19.9 trillion as of July 2022
- The World Bank, however, warned Nigeria to do something about its highly bloated subsidies payment or face a financial crisis
The total borrowing from the Central Bank of Nigeria by the government via Ways and Means Advances increased from 17.40 trillion as of December 2021 to N19.9 trillion in June this year.
The Punch report cites CBN data as saying that this indicates that the federal government borrowed N2.45 trillion from the Emefiele-led CBN in six months.
CBN debt not part of national debt stock
The 19.9 trillion owed CBN is not part of Nigeria’s total debt stock which is at 41.60 trillion as of March 2022, a Debt Management Office said.
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The public debt stock adds to the debts of the federal government of Nigeria, state governments and the Federal Capital Territory, Abuja.
Ways and Means Advances is a loan facility via which the CBN funds the shortfalls in the government’s budget.
BusinessDay report said that governors have asked that the N19.01 trillion CBN loan be converted to a 100-year bond with an interest rate of one per cent.
The governors made the suggestion during a meeting with President Muhammadu Buhari in July.
Under section 38 of the CBN Act, 2007, the bank may give temporary advances to the federal government regarding temporary deficiency of the budget at such interest as the bank deems fit.
World Bank warns: Nigeria is facing existential threat
This comes as World Bank sounded the alarm that Nigeria may be facing an existential threat over its bloated subsidies payments.
The global lender stated that the continued payment of trillions of naira on petrol subsidy by the Nigerian government and economic challenges portends a dangerous curve for the nation’s economy.
The Punch report said the Washington-based bank raised the alarm on Wednesday, August 10, 2022, warning that unless Nigeria revamps its tax system and focuses on other avenues to generate revenue, the low income would continue to dwindle.
The bank said that Nigeria is not benefiting from the current increase in the price of crude due to the huge amount it spends on subsidies.
Nigeria’s debt profile Hits N2.04 trillion in first quarter of 2022
Recall that Legit.ng reported that on Tuesday, June 7, 2022, the Debt Management Office (DMO) said that Nigeria’s total public debt went up by N2.04 trillion, bringing the total of it to N41.60 trillion in the first quarter of 2022 from N39,56 trillion as of December 2021.
There was an increase of N2.04 trillion within three months.
The public debt stock includes the total domestic and external debt of the Federal Government of Nigeria, the 36 states and Abuja.