Nigeria’s continuous borrowing could keep its economy in jeopardy as latest investigations revealed that total Central Bank of Nigeria’s Ways and Means loans to the Federal Government have now risen to N22.8 trillion as of September 2022.
This is coming after data from the bank’s periodic publications revealed that its Ways and Means’ loans to the Federal Government in September rose by N749 billion.
This could be the highest loan extension to any government in Nigeria’s history via Ways and Means.
Economic experts who spoke to Daily Sun, said the loans could continue to rise in the months ahead given the low revenues from taxes and crude oil sales, adding that this could push the economic jeopardy as a new administration prepares to take over next year.
Ways and Means is a loan facility through which the CBN finances the government’s budget shortfalls.
It also allows the government to borrow from the apex bank if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
The CBN Ways and Means stood at about N648 billion when the current government came to power in May 2015.
However, since experiencing significant shortfall in revenue, the Federal Government has relied heavily on the CBN to finance its expenditure programmes via Ways and Means.
Federal Government confirmed it has missed out on its revenue target when it published its 2022 budget assessment. As of August 2022, the country’s retained revenue was N4.23 trillion, 64 per cent of the pro-rata target of N6.65 trillion.
Meanwhile, the FGN share of oil revenues was N395.06 billion (representing 27.1 per cent performance), while non-oil tax revenues totalled N1.549 billion, a performance of 102.9 per cent.
The actual expenditure amount was N9.56 trillion (N3.5 trillion on debt service) compared to the target of N11.55 trillion.
While the government struggles with revenues its budget deficit continues to widen ballooning past its pro-rate target. According to the government, the N5.33 trillion deficit as of August is N430.82 billion above the pro-rate level. The level of borrowing is also N1.26 trillion ahead of the July target.
However, an economic analyst who preferred to remain anonymous said, Nigeria has borrowed way too much as the loans by the CBN is killing the economy.