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.
Finance Minister Accused Budget Office of Padding
The budget office added N206 billion to the budget of Ministry of Defence, Ministry of Humanitarian Affairs and the Nigerian and the National University of Commission (NUC)
The Budget Office of the Federation (BOF) has been alleged of being behind the recent budget padding totalling about N206 billion.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed disclosed in a statement issued by the ministry.
Investors King had earlier reported that some ministries and government agencies including the Ministry of Defence, Ministry of Humanitarian Affairs and the Nigerian and the National University of Commission (NUC) had raised alarm about padding in their respective budget proposal.
Reacting to the development, the Minister of Humanitarian Affairs and Disaster Management wrote a letter to the Ministry of Finance, seeking clarification.
Therefore, when appeared before the House Committee on Appropriations, the Minister of Finance noted that the error emanated from the Budget Office of the Federation.
According to the statement released by the Ministry of Finance, the Minister told the legislators that “there was an error in the budget of the Ministry of Humanitarian Affairs as the N206 billion captured in the budget proposal of the ministry was wrongly coded by the Budget Office”.
She added that “the N206 billion alleged insertion, which had generated serious reaction within the week, was for the national social safety nets project funded by the World Bank and domiciled in the Humanitarian Ministry,” the statement read.
Zainab further clarified that the figure in question was not a deliberate act of budget passing but an oversight.
“The wrong coding resulted in the item being wrongly captured as ‘purchase of security equipment but that it had nothing to do with Budget padding, but an oversight,” she said.
Meanwhile, the House of Committee has berated the Minister of Humanitarian Affairs for her failure to appear before various committees of the House to defend the ministry’s 2023 budget proposal.
The committee thereafter advised her to resign if she was not capable to do her job.
“Most times the committee calls the minister, she refuses to come. If she is not ready for the job, she should quit,” the committee chairman stated.
No Plan to Print N5000 Note; Says CBN
The Central Bank of Nigeria (CBN) has denied plans to print N5,000 denominations
The Central Bank of Nigeria (CBN) has denied plans to print N5,000 denominations, the clarification was made by the Director of Currency Operations, Ahmed Umar during an event in Port Harcourt, Rivers State.
Umar, who was represented by Amina Halidu-Giwa, Head of Policy Development at CBN Currency Operations Department was quoted to have said “We are not introducing any new note. Some people have seen one N5000 note that we don’t know about”.
Investors King learnt that various mock-up designs of N5000 notes have surfaced on the internet amid the anticipation of the CBN naira redesign policy.
It could be recalled that the apex bank had introduced newly redesigned notes which the bank claimed will help to address currency circulation, counterfeiting, and terrorism. The affected denominations include N200, N500, and N1000 notes.
Speaking on the development, Umaru noted that the central bank will be printing a significantly limited amount of the redesigned currency to promote cashless policy.
“What we are printing is going to be very limited because we want other means of settling transactions to be used,” he noted.
It is understood that the apex bank has often encouraged Nigerians to embrace cashless policy as a way of promoting financial inclusion and to prevent currency mutilation.
In this direction, the CBN also launched the e-Naira, a form of digital naira which has the value as the naira notes.
Meanwhile, Cable news has also reported that the viral video of the N5000 denomination is fake.
Cable news stated that the video has been on Facebook and Youtube since 2020.
While acknowledging the video in 2020, the CBN also released a statement to dispel the unfounded rumor.
A statement which was released by the apex bank in May 2020 partly read, “Videos and pictures of purported circulation of N2,000:00 and N5,000:00 banknotes are false and fake”.
“Members of the public are advised to disregard such falsehood and to report anyone found in possession of such banknotes to the law enforcement agencies”.
Private Jet Owners Refused to Pay N30bn Tax; Drags FG to Court
These jet owners, including business moguls and leading commercial banks, have dragged the federal government to court to seek judicial review to ascertain if they are liable by law to pay the import duty imposed on them.
A number of wealthy Nigerians who own private jets have refused to pay more than N30 billion in import duty tax, the Nigeria Customs Service.
The owners, including business moguls and leading commercial banks, have dragged the federal government to court to seek judicial review to ascertain if they are liable by law to pay the import duty imposed on them.
Investors King could recall that the Federal Government had approved the decision of the Nigeria Customs Service (NCS) to ground 91 private jets belonging to some wealthy Nigerians over their alleged refusal to pay import duties running to over N30 billion.
The Nigeria Customs Service claimed that the owners are liable to import duties since the private jets are foreign-registered.
Subsequently, acting upon the presidential approval, the Customs Service directed the Nigerian Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN), and the Nigerian Airspace Management Agency (NAMA), to ground the affected private jets with immediate effect.
Meanwhile, owners of the private jets have filed a court case to stop the import duty imposed on them by NCS.
The owners who have approached the Federal High Court in Abuja are seeking the court to determine, among other things, if they were liable to pay import duty.
Investors King learnt that the owners filed their cases using their trustee companies to hide their identities.
Some of these trustee companies most of which are foreign firms include, Aircraft Trust and Financing Corp Trustee, UAML Corp, Bank of Utah Trustee, Masterjet AVIACAO Executive SA, Empire Aviation Group, and Osa Aviation Limited and Cloud Services Limited.
According to the court document, at least 17 applicants have filed cases against the import duty.
While speaking on the development, the President, Association of Private Aircraft Owners, Mr. Alex Nwuba noted that the government needs to show a higher degree of transparency in the process of registering private jets.
He concluded that while the government is aiming to generate revenue from all means possible, the import duty imposed on the private jet owners might be too much.
“If you buy a private jet for $80m, you may need to pay a duty of over $10m; that may be high to some people,” he said.
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