CBN Prints Another N4trn in Seven Months for President Buhari to Spend As Debt Hit N22trn

• Nigeria's Central Bank has been printing money to fund the federal government's spending
• The total amount has increased from N789.67 billion in 2015 to more than N22 trillion now
• In the first seven months of 2022, the FG has collected over N4 trillion from the Central Bank of Nigeria

Despite high oil prices, the federal government has requested from the Central bank of Nigeria another N4.6 trillion in the first seven months of 2022.

The figure is contained in the latest debt breakdown published by Debt Management Office, Punch reports.

Analysis shows that the new funding brings the total direct funding of CBN to the Federal government through Ways and Means Advances to N22.07 trillion (about S47billion) as of August 2022.

This is a massive jump when compared to N17.4 trillion at the end of December 2021.

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It is even crazier when one looks back and realised that as of 2015 when President Muhammadu Buhari came to power, the Federal government debt to CBN stood at N789. 67 billion.

In effect, the CBN has been printing money seriously to fund the government’s spending amid revenue challenges.

How does CBN fund FG?

CBN funds the government through Ways and Means Advances (WMA), a loan facility used by the Central Bank to finance the Federal Government in periods of temporary budget shortfalls subject to limits imposed by law.

Legit.ng had earlier shown how the CBN has already broken its own law on limits.

Expert reacts to CBN funding

Reacting to CBN's funding of government needs, Dr Doyin Salami, a renowned economist and former member of CBN's Monetary Policy Committee (MPC) said the CBN was providing a “piggy-bank” service to the federal government.

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He warned that CBN must balance out the increased government lending if it wants to fight inflation.

Similarly, Economist Intelligence Unit, EIU in a recent note urged CBN to stop the printing of money for government spending.

Part of the note reads:

"Building credibility in the target rate (of inflation) has not been a priority in recent years. The continued printing of money at the same time as tightening policy would prevent effective control of the price level”

FG repays some of the debt to CBN

In another report, the Budget office over the weekend revealed that the federal government has paid N714.74 billion in interest from January to June 2022.

A breakdown shows from April to June 2022 alone, the FG interest payment on Ways and Means Advances amounted to N365.82 billion, which the report said, did not have any budgetary provision in the review period.

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CBN can't find enough dollars

Meanwhile, Legit.ng reported that Foreign airlines operating in Nigeria are struggling to repatriate their dollar dividends and are stuck with naira they don’t need.

The idle cash lying in the Nigerian accounts of over 30 airlines is now a source of worry.

The trapped money rose from $147 million (N61 billion) as of August 2021 and has nearly doubled, reaching $283m (about N117.6bn).

Source: Legit.ng