… FG borrows more money from CBN
The total amount borrowed from the Central Bank of Nigeria through Ways and Means Advances by the Federal Government increased from N17.46 billion in December 2021 to N19.01 billion in April 2022.
According to CBN data, this represents a N1.55 trillion increase in the first four months of 2022.
According to the Debt Management Office, the N19.01tn due to the apex bank by the Federal Government is not included in the country’s total public debt stock, which stood at N41.60tn in March 2022.
Only the debts of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory are included in the public debt stock.
The CBN uses Ways and Means Advances as a loan tool to cover the government’s budget gaps.
The CBN, on the other hand, has warned on its website that the Federal Government’s borrowing from it through Ways and Means Advances could have negative consequences for domestic pricing and exchange rates.
“The direct consequence of central banks financing deficits is monetary base distortions or surges, resulting in unfavorable effects on domestic prices and exchange rates, i.e. macroeconomic instability due to excess liquidity pushed into the economy,” the report stated.