Amid Nigeria’s rising debt profile, a new document has shown that the Federal Government’s borrowing from the Central Bank of Nigeria (CBN) is now N22 trillion as of August 2022.
Investors King understands that this loan to the federal government by the CBN is different from the country’s total debt profile which stood at N42.84 trillion as of June 2022, data from Debt Management Office (DMO) has shown.
The public debt profile is the debt owed by the federal government and all the 36 states of the federation including FCT.
In August 2022, Federal Government borrowed N1.46 trillion from the CBN through Ways and Means Advances.
Ways and Means Advances is a loan facility through which the CBN finances the shortfalls in the government’s budget subject to limit by the law.
As of December 2021, the Federal Government debt to the CBN was N17.4trillion. This means that between January to August 2022, the Federal Government borrowed a sum of N4.6 trillion from the apex bank.
Additionally, data from the budget office also revealed that the federal government paid a sum of N714.74 billion in interest on the loan from January to June 2022.
Meanwhile, financial analysts and economic observers hold divergent opinions on the increasing debt profile of the country.
A professor of economics at Olabisi Onabanjo University, Prof Sheriffdeen Tella stated that ” Other countries are not ready to lend Nigeria money because we already owe a lot of money. So, the last resort is to go to the CBN”.
Some economic observers lampoon the present administration for having a knack for borrowing when it ought to increase its revenue-generating capacity.
It will be recalled that in May 2015, when President Muhammadu Buhari came to power, the total borrowing from the CBN was N789.67 billion. This debt has been growing steadily to its present figure of N22 trillion.
Similarly, the Federal Government has planned to make additional borrowings to finance the deficit in the 2023 budget. Investors King had earlier reported that the 2023 budget has a deficit of N10.78 trillion.
