The Federal Government has borrowed N6.31tn from the Central Bank of Nigeria through Ways and Means Advances in 10 months. This has pushed the Federal Government’s borrowing from the CBN from N17.46tn in December 2021 to N23.77tn in October 2022.
The N23.77tn owed the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N42.84tn as of June 2022, according to the Debt Management Office.
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 shortfalls in the government’s budget.
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.
Inflation to fall below 15% by end of 2023
Meanwhile, the Central Bank of Nigeria (CBN) has said its in-house model-based simulations indicate that inflation rate could fall steadily to less than 15 per cent by the end of 2023. This was even as the apex bank reiterated that it is determined to maintain its stable exchange policy stance over the next few months through innovative policy measures to manage the demand and supply of foreign exchange.
The CBN Governor, Godwin Emefiele, stated this during the 57th Annual Bankers Award Dinner which held in Lagos at the weekend. The short-term outlook of the global economy is increasingly bleak as the lingering effects of the pandemic-induced supply chain disruptions and economic fragmentation is worsened by the uncertainties triggered by the eruption of the Russian-Ukraine war.
The IMF has projected that more than a third of the global economies will suffer a recession within the next two years, especially as the US, EU and Chinese economies stagnate. As external conditions flounders, Emefiele said inflationary pressure is expected to worsen and become more persistent in many economies.
