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Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report - Politics - Nairaland

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Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by ijustdey: 2:05pm On Jun 14, 2022
By Sami Tunji

The Federal Government’s total borrowing from the Central Bank of Nigeria through Ways and Means Advances rose from N17.46tn as of December 2021 to N19.01tn as of April 2022.

According to data from the CBN, this represents an increase of N1.55tn within the first four months of 2022.

The N19.01tn owed the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N41.60tn as of March 2022, according to the Debt Management Office.

The public debt stock only includes the debts of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory.

Ways and Means Advances is a loan facility through which the CBN finances the government’s budget’s shortfalls.

According to Section 38 of the CBN Act, 2007, the apex bank may grant temporary advances to the Federal Government with regard to temporary deficiency of budget revenue at such rate of interest as the bank may determine.

The Act read in part, “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.

“All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted and if such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid.”

However, the CBN has said on its website that the Federal Government’s borrowing from it through the Ways and Means Advances could have adverse effects on the bank’s monetary policy to the detriment of domestic prices and exchange rates.

“The direct consequence of central banks’ financing of deficits are distortions or surges in monetary base leading to adverse effect on domestic prices and exchange rates i.e macroeconomic instability because of excess liquidity that has been injected into the economy,” it said.

In June last year, London-based Capital Economics, in a report titled ‘The perils of deficit monetisation in Nigeria’, noted that over the past six years, on average, around 55 per cent of annual budget shortfalls has been financed by the CBN.

“Many of the problems plaguing Nigeria’s economy – from high inflation to a persistently overvalued currency – are tied to the government’s sustained reliance on the central bank to cover fiscal financing gaps,” it said.

The World Bank had in November last year warned the Nigerian government against financing deficits by borrowing from the CBN through the Ways and Means Advances, saying this put fiscal pressures on the country’s expenditures.

The Washington-based bank added that the Federal Government’s borrowing from the CBN was increasing the cost of debt in the country.

“Cost of debt is high as Federal Government also resorts to overdraft (Ways and Means financing) from the CBN to meet in-year cash shortfalls,” it stated.

It, however, said that the Federal Government was making efforts to negotiate terms with the CBN in order to convert the stock of overdraft financing into a long-term debt instrument, which would lower the cost of debt for the government and enhance fiscal sustainability over the medium-long term.

Despite warnings from experts and organisations, the Federal Government has kept borrowing from the CBN to fund budget deficits.

The PUNCH had reported that the Federal Government paid an interest of N2.03tn from January 2020 to November 2021 on the loans it got from the CBN through the Ways and Means Advances.

A professor of Economics and Public Policy at the University of Uyo, Prof Akpan Ekpo, said there was a need for the government to minimise its usage of central bank financing.

He however noted that “I hope they are borrowing to finance capital projects, not for recurrent expenditure.”

“The ideal thing is to avoid the Ways and Means facility, and most countries avoid that,” he added.

The Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane, had stressed the need for the government to securitise the debt, which he described as quite large.

He said, “What we need to do is to actually securitise this formally. But I think that right now, the Federal Ministry of Finance or DMO is paying interest on the Ways and Means advances. So, the effect is that there is a cost to the borrowing, and the central bank is receiving the interest on it.”

The Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu, said the central bank borrowing put pressure on the exchange rate and the inflation rate, with “liquidity that has no productivity attached to it coming into the system.”

He said, “What that means is that the central bank has been struggling with mopping up excess liquidity as a result of injection of liquidity not coming from productive activities but rather from Federal Government’s W&M borrowing.

According to Chukwu, the securitisation of the ways and means advances will further increase the interest obligations of the Federal Government.

“It might be difficult for the Federal Government to securitise those borrowings. The key thing for me is that we need to restructure the fiscal framework of the country so that we take out this dependence by the Federal Government on CBN funding,” he said.

An economist and public sector reforms expert, Dr Chiwuike Uba, who is also the chairman of the Board, Amaka Chiwuike-Uba Foundation, urged the government to reduce its appetite for borrowing.

He said, “The truth is that it will be very difficult to stop borrowing abruptly in light of the situation we are in. However, we must reduce our appetite for borrowing to refocus, redirect and rethink our need for borrowing.”

He further advised the government to adopt other public-private partnership arrangements to implement various capital projects in the country rather than accumulating debts.

A development economist, Aliyu Ilias, said the refusal of the government to remove petrol subsidy had significantly increased expenditure, forcing the government to resort to borrowing to close its widening fiscal deficit.

He advised the government to seek better ways to generate revenue, such as widening its tax net and privatising its assets.

https://punchng.com/fgs-borrowing-from-cbn-hits-n19tn-inflation-may-worsen-report/

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Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Nobody: 2:09pm On Jun 14, 2022
Help save Nigeria

34 Likes 2 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Nobody: 2:10pm On Jun 14, 2022
Would we rather vote who put us in this mess or vote who worsened the mess....

Peter obi should not be an option, its our hope on survival, if not for anything, atleast a route we have not journeyed yet..

Vote right, vote labour, vote peter obi...

247 Likes 20 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by alsudan: 2:11pm On Jun 14, 2022
Nigeria desperately needs Peter Obi to stop it from heading into Oblivion, and not some 70 something years old thieves with expired analog brains

154 Likes 14 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by ygowon: 2:23pm On Jun 14, 2022
AO. Na disaster. Never again

3 Likes 2 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by NobleAngell(f): 2:25pm On Jun 14, 2022
I fear for the next president after this current administration. It may take an entire tenure or a tenure-and-half(6 years) to stabilize this country. The person might end up just suffering. This rot has eaten too deep, right from the days of PDP and then APC doubled up.

51 Likes 3 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Godjone(m): 2:38pm On Jun 14, 2022
Buhari will never know peace for plundering this great nation in to disaster

79 Likes 7 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by ygowon: 2:38pm On Jun 14, 2022
Godjone:
Buhari will never know peace for plundering this great nation in to disaster
Not only Buhari but all those who put him there, APC, Tinubu and Co

107 Likes 7 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by sonature1: 5:07pm On Jun 14, 2022
Can Buhari just resign so that Osinbajo can run this country from now to the end of their tenure? I cannot remember the last time I read good news about Nigeria from federal government.

52 Likes 4 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by vovopivo: 5:07pm On Jun 14, 2022
Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by shuttox: 5:07pm On Jun 14, 2022
APC
APC
APC
APC
APC
Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Prayfortheworld: 5:07pm On Jun 14, 2022
I urge everyone to please be obideint.. let's save this dying country
this is not about tribe this is about getting it right in this country.
Because now that this regime has failed us,Everyone is going through hell no one was exempted expect you're rich no tribe or region Dy enjoy na everybody dy suffer am

I'm obideint

72 Likes 3 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by SIMONEKPA7: 5:07pm On Jun 14, 2022
Killer Squad. Bury the Economy . APC agender

10 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by McOluOmo: 5:08pm On Jun 14, 2022
Wow!










Guys wey no get girlfriend get peace of mind
Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by owiko(m): 5:08pm On Jun 14, 2022
By the time Nigerians are ready to do the needful, it may be too late

9 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Honor10: 5:08pm On Jun 14, 2022
Tinubu is coming to the rescue.


Tinubu is a wise and sound administrator.

I am BATified

67 Likes 1 Share

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by 5iine: 5:08pm On Jun 14, 2022
Dey borrow public funds carry dey give almajiris wer no dey work anytin

7 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by africanpride1: 5:08pm On Jun 14, 2022
*Only A Pathetic Incorrigible Fool Will Hate His Own Blood Brothers*

Exactly! Greater Nigeria is all that we Progressive Muslims are working towards now. Our Eyes are now very Clear and wide Open to the infallible Truth that *Blood is Forever Thicker than Water of Religion. We must Not allow ourselves to be manipulated through our myopic self-destructive Ego into Betraying our Children and Unborn Generation into eternal Slavery as intended by those that think we are gullible through Religion.*

*Our Ancestors that handed Over this Lands to us would forever Curse us Heavily from their Graves if we selfishly fail to Safeguard it as they did for our sake. And our Unborn Generations shall never Forgive us, in fact they shall Forever Spit on our Graves every morning if we become the Most Useless Self-deceitfully Religious Gullible Generation that allow ourselves to be manipulated to Lose our Glorious Birthright and United Tribal Greatness through myopic Ego.*

*We are Responsible, we refuse to be pushed by selfishness and self-centeredness into becoming irresponsible as regards the future of our Children and our next Generation. Only shallow-minded Souls would refused to Manup and be Real Preservers of the Indomitable Tribal Unity, Progressive Brotherliness, Bloodline Indivisiblity and impenetrability that has helped our Fathers Preserved this Ancestral Land that they Handed over to us(which we MUST Unitedly Boldly Preserve and Hand over to our next Generation too! We can't Afford to be the Senseless Failed Generation! Never!)*

*History, we know and we are never fools that would Forget why we Won their satanic fierce War of 1840 in which they aimed to render us eternally Homeless and take over our Ancestral Father Land. They Tried and they woefully Failed because we truly Treasured our Brothers as our Truly beloved Blood Brothers, we still do, only a myopic Braindead Fool will be deceived to do otherwise.*

*Well Documented in History that we Yorubas United as One regardless of Religious differences or Clan and mercilessly Destroyed our Enemies at the Oshogbo War of 1840. Our Enemies then realized that they can Never take over our Ancestral Father Land from us as Long as we stay United to Love and Prioritize ones another as true Yoruba Brothers and Sisters. This is why they are now massaging the over-bloated Ego of some myopic shallow-minded ones to make them Betray other Yorubas in the Name of Religion. Afonja was used and dumped like bad Habit, he was then cheaply brutally beheaded after they used him to Conquer Ilorin. "Yoruba Ronu! Ronu!! Ronu!!! Sonu, koo ma baa Sonu!"*

*We were born as Yorubas First before we are Muslims or Christians or even Traditionalists. Humans are free to change Religions at any Time because Religions is not Cultism. Even Cults can be renounced. But the priceless Glorious Yoruba Blood in you and I shall Forever keep us unitedly Connected as Bothers and Sisters. That is staright from our CREATOR, far Superior to bond of Religion.*

Even, Hausa Muslims have spoken to many of we Yoruba Muslims and said we shall be the most Senseless of Worthless Fools is we don't take Advantage of the learning from their own Case; how Fulanis manipulated, divided, deceived and Enslaved them till date in the Name of religion. They killed their indigenous Traditional Kings and refused to Enthrone Hausa Muslims as Emirs but only Fulanis which Replace and Enslave the original Land Owners right on their own Father Land till date.

It happens all across History of Humanity: Pure 419 manipulation carefully implemented on numbskulls and gullible Souls that refused to truly Love and Protect their very own Tribemen and their very Own People. *Our own is Our very Own! No Religion can ever come inbetween Wise Yorubas.* A warning for any gullible Soul, Fulanis would never never truly see you as their Brother. Never as your Own Blood Brothers does despite difference in Religion.

If you Betray your Yoruba Brother(s) to them, be sure that non would be available to sorround you as Yoruba Brothers from Ekiti, Ondo, Oyo, Ogun, Badagry, Ibadan, Benin, etc. Gallantly flocked in to defensively Sorround Oshogbo and Prevented Oshogbo from becoming Enslaved as demonically Planned by the Enemies of Yoruba People. *Imagine that you are Oshogbo Personified, if you betray any Yoruba, you shall not have Yorubas to Surround, Support, Defend and Protect you! Your case shall surely be like Afonja. He thought he has found friends or brothers that are better than his own Yoruba Brothers. As soon as the Enemies finished using him to Rob and Hijack his Ancestral Father Land, they callously slaughtered him by Brutally Cutting off his Head which they also place on the Stick in the Market Place as monumental Disgrace for all to see. All Yorubas daily Place Heavy Curses on Afonja's head till today, whether audibly or inwardly.*

All intelligent original Nigerian Muslims that our Fore-Fathers own Nigeria and handed over Nigeira to us are tired of being manipulated and enslaved on our own Father Land by Invaders. Their old tactics of making us to Hate our very Blood Brothers have been observed over the Years. If truly they, love us as equal Muslims, while did they kill all the Original Hausa Kings and Enthroned Fulani Muslims instead of Hausa Muslims as Rulers over the Land Owners?! Same in Ilorin where the Yoruba King was killed and not Yoruba Muslim was Enthroned, but their Fulani to enslave our Yoruba People as slaves. Original Intelligent Nigerians have seen that their Ultimate aim is to Deceitfully use Religion to Weaken us, Divide us, Turn we Blood Brothers against one another so that they can Hijack our Ancestral Lands
as they did to Hausas and Enthroned themselves and subverts the Original Land owners as Permanent Slaves.

I'm a Muslim and many truthful and sensible Yoruba Muslims and even real Hausa Muslims have been saying the Truth that was not Popularized. Many of us truthful Muslims are tired of seeing Nigeira becoming so stagnated by Visonless people that have nothing good to offer Except to play this religious card. Ghana is now far more Respected and Progressive than Nigeria because this People don't care a hoot about Real Progress for this Country.

Only gullible ones still get manipulated by them. Greater Nigeria that we can all be Proud of is what we demand! That Nigeria is already starting, but a few Population is already trying to manipulate the Country into another unnecessary Hatred! Our eyes don Clear! Tinubu has really worked up to this Level. Every sensible Person knows that Christians would massively Vote Atiku in as President if Tinubu falls for this myopic Trap. Religious Extreemists should not manipulate him to fall for the Muslim-Muslim that guarantees failure for his Life-long Ambition.
Same few population that came into our Land to use Religion to Deceive and Divide Orginial Nigeirans. Not sure if Tinubu can last long on the Seat if he chose any of them as Vice, they have done their Turn! They should allow Tinubu free hand to chose a Christian like he said in a meeting that Christian Vice is best for Balancing, Uniting and Progressiveness of the emerging Great Nigeira. Just as he wisely Balanced Lagos Politics till date. The Nigeria Invaders Greed for Power and Land-grabbing from Orginial Nigerians is well known. They Kill real Hausa Muslims anyhow and take over their Lands, they killed Abiola and his Wife, any Yoruba or Hausa Muslim that Support their latest religious Manipulation is an incorrigible daft. Those that even mute the idea of Muslim-Muslim ticket in a Secular Country must Apologize to all Nigerias immediately! *Not long ago, Same deceptive manipulative People tried to force their Fulani Person on Nigerian as Consensus Candidate of APC which Tinubu, Hausas and Yorubas painstakingly Laboured to make successful. What most don't know is that it was majorly Hausa Muslims that kicked against them before some of them supported when they knew the idea was dead on arrival.*

They have Proven that they wish Tinubu and Original Nigerias no good at all. I will not like all efforts that Tinubu as made to become useless beacuse of some myopic People that think with their Anus.

*Regardless of your Religion, when shall Original Nigerians have sense and stop being enslaved by the Enemies' Tricks and Deception?! Hausa Lands in the North and Ilori, still crystal Clear for all to see that they want to enslave us all Muslims and Christians on our own Ancestral Father Land! Are you Destined to become an Eternal Slave when you were not born a Slave?*

*Our Fathers refused to be deceived or brainwashed, our Fathers refused to be manipulated to hate other Yorubas because of Religion, our Fathers Protected their Wives and Children from the Invaders. We are not Bastards, our Fathers were too Wise to be manipulated against their fellow Yorubas, and our Fathers were too Strong for the Enemies. Our Fathers mercilessly and massively Destroyed them, till the remaining ones flee with their tails between their legs urinating on their bodies never to return again. Do you want to allow senseless myopic Ego to make you become a Slave Forever?!*

*I was born Free, I as among all sensible Yorubas and Nigerians have Vowed to Ensure that no inch of our Father Land shall ever be lost in our own Generation. We refuse to be Slaves. We Declare that Free were we Born, and Forever Indomitably United we Yorubas remain! Unconquerably Free We are and Shall forever Thrive on our Ancestral Father Lands!*

#Copied!

5 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by specialmati(m): 5:09pm On Jun 14, 2022
grin grin angry grin grin grin grin if to say APC party of rogues never use hunger reduce the thinking faculty of some youths. The country for just round anything APC and stone them. I they shame for all these senseless youth wey they support all those money bags. You will just be hearing money figures and keep asking what they did with it. No wonder they sold form 100 million. Please if you are supporting APC or PDP make sure you collect the amount of bribe they paid to delegates ooh. You are not less human. Peter Obi please come and take the stearing ooh and put like minds in position so we can move forward

14 Likes 2 Shares

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by tempest01(m): 5:09pm On Jun 14, 2022
If only Nigerians can make the right choice in 2023. The next president should ideally recover all the loots from these monsters and use it to repay this.

I sha pity Nigerians and the next president. The debt he will face ehn...he will practically be able to do nothing without more debt.

And people are spending millions of dollars for just primaries. And you expect them not to continue from the looting of this failed government.

Nigerians will be wise by force.

5 Likes 1 Share

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by inoki247: 5:09pm On Jun 14, 2022
lol with the way things are going FG might start borrowing from the Citizen undecided undecided

5 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by ken6488(m): 5:09pm On Jun 14, 2022
F
Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Mystic216: 5:09pm On Jun 14, 2022
Vote Peter Obi if you want to have a sweet country that you desire

16 Likes 1 Share

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by blingxx(m): 5:09pm On Jun 14, 2022
At this rate .. shey I no go japa go Ghana laidis undecided

2 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Stronghold91: 5:10pm On Jun 14, 2022
buhari just dey store this Nigeria money
for his children children

3 Likes

Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Epstein(m): 5:10pm On Jun 14, 2022
Nice!
Re: Fg’s Borrowing From CBN Hits N19tn, Inflation May Worsen – Report by Goldenkrezi: 5:10pm On Jun 14, 2022
Omo this debt don dey too much ooo....

4 Likes

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