For adverts Placement only email: [email protected]

Thursday, 30 November 2023 10:39

FG Takes Fresh N4.05trn Loan From CBN

Domestic Market Amidst Ways And Means Outcry

 

The federal government has taken N4.047trn additional borrowings between January to September 2023, thereby raising fresh concerns on a repeat of the abuse of the ‘Ways and Means’ loan taken by the immediate past president, Muhammadu Buhari and the former Central Bank Governor, Godwin Emefiele.

The borrowing was taken from the domestic market.

This was disclosed in the breakdown of the 2024 executive budget proposal.

The 2023 N24.trn budget has a projected fiscal deficit of N13.79 trillion, with a pro-rata deficit of N10.33 trillion at the end of September.

However, the actual deficit was N4.05trn, and was mainly financed by domestic borrowing.

The breakdown of the borrowing showed budgeted, “Domestic borrowing (including CBN) is N7.043bn; pro rata (January to September) N5.28trn and Actual (January to September) N4.047trn. Variance was N1.235trn.”

Nigeria’s total public debt portfolio as of June 30, 2023, was N87.37trn.

External debt component of the amount is N$43.15bn or N33.24trn, converted at N770.38 per dollar, while total domestic debt is $70.26bn or N54.13trn.

“The Domestic Debt of the FGN includes the N22.7 trillion Ways and Means Advances at the CBN for which the approval of the National Assembly (NASS) to securitize it was received in May 2023,” a statement from the Debt Management Office reads.

Section 38 of the CBN Act 2007 provides for Ways and Means, which is a facility that allows the CBN to fund the government’s short-term financing needs. It, however, must not exceed 5 per cent of previous years’ actual revenue.

But the immediate past government led by Buhari exceeded the 5 per cent prudential benchmark and pushed for the securitisation of the N22.7trn ways and means.

The DMO securitised the N22.7trn for 40 years tenor with moratorium on principal to be paid in three years at 9 per cent interest rate per annum.

1110 times


Join us on Whatsapp Channel Subscribe to Telegram Channel