- Peter Obi, the presidential candidate of the Labour Party, has slammed the Nigerian government for its excessive borrowing for consumption
- Obi said the government should peg its borrowings on 5 per cent of the previous year's revenue and also slammed state governments for borrowing beyond their revenue
- Obi said this in a tweet just as the Central Bank of Nigeria revealed that the federal government N2.46 trillion from it in 18 months
The presidential candidate of the Labour Party, Peter has warned Nigeria to stop borrowing to consume, saying borrowings must be limited to 5 per cent of the previous year’s revenue.
In a slew of tweets on Wednesday, August 10, 2022, the presidential hopeful warned that Nigeria must limit borrowing for consumption.
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“As a matter of urgency, Nigeria must stop borrowing for consumption, but only borrow to invest in regenerative development projects and other productive ventures.
He also warned that most states that received fiscal bailouts did not invest them properly but rather embarked on borrowing sprees above their earnings.
The presidential aspirant said:
"It's ironical (sic) that States that received fiscal bailouts did not invest in them properly; did not repay the loans and are still borrowing beyond their revenue earnings."
The former governor of Anambra state stated that the country must invest in regenerative developmental projects and other productive endeavours.
“Also, it has become imperative to restrict Federal borrowings to the statutory 5% of the previous year’s revenue,” he added.
This comes as CBN said that the federal government has borrowed about N2.45 trillion from it in 18 months.
FG borrows from CBN to fund budget
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.
Nigerian Government Borrows N2.45 Trillion From CBN, World Bank Warns of Existential Threat Read more: https://www.legit.ng/business-economy/economy/1485417-nigerian-government-borrows-n245-trillion-cbn-world-bank-warns-existential-threat/
Nigerian government borrows N2.45 trillion from CBN, World Bank warns of existential threat
Recall that Legit.ng reported that the total borrowing from the Central Bank of Nigeria by the Nigerian 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.
The public debt stock adds to the debts of the federal government of Nigeria, state governments and the Federal Capital Territory, Abuja.