According to latest information from the apex bank, the Federal Government borrowed N6.07 trillion through Ways and Means Advances from the Central Bank of Nigeria in 2022.
As a result, the Federal Government borrowed N23.53 trillion from the CBN in December 2022 as opposed to N17.46 trillion in December 2021. However, given that the debt was N23.77 trillion in October 2022, the Federal Government may have borrowed more than N6.07 trillion.
By December, it seems that debt servicing may have marginally decreased it to N23.53 trillion. Recently, the Senate and the House of Representatives accepted the President’s proposal for a restructuring of the Ways and Means Advances, which increases the stock of current debt.
The Ways and Means provision allows 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. Since the 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.
The Federal Government had said it would repay the loan with securities such as treasury bills and bonds issuance.
Prominent economists, Nigeria Employers’ Consultative Association and opposition parties took a swipe at the President, Major General Muhammadu Buhari, (retd.), and the National Assembly over the government’s over N22.7tn extra-budgetary spending approved by the legislative chambers.
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 Federal Government under its Ways and Means provision, Nigeria’s total debt will rise to N68.95tn.
The Debt Management Office recently revealed that Nigeria’s total public debt stock increased to N46.25tn in the fourth quarter of 2022. It stated that the figure consisted of the domestic and external total debt stocks of the Federal Government and the sub-national governments (36 state governments and the Federal Capital Territory).
The Senate Leader, Ibrahim Gobir, 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.
Gobir added that the Special Committee was set up by the Red Chamber 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.
He noted that 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