Despite growing concerns about its repeated recourse to central bank financing, the Federal Government borrowed N1.55 trillion from the Central Bank of Nigeria in the first four months of this year, official data have shown.
Data obtained by Markets Reporters from the CBN revealed that the debt owed to the apex bank by the Federal Government rose to N19.01 trillion as of April from N17.46 trillion at the end of last year.
The International Monetary Fund, the World Bank, and some financial experts in the country have often expressed concerns over the government’s borrowing from the Ways and Means Advances.
Ways and Means Advances is a loan facility used by the central bank to finance the government in periods of temporary budget shortfalls subject to limits imposed by law.
The country’s public debt stock surged by N6.64 trillion last year to N39.55 trillion in December, according to the Debt Management Office.
The debt owed by the Federal Government to the CBN is currently not included in the data on public debt stock, which comprises the debts of the Federal Government, the 36 state governments and the Federal Capital Territory.
The government turned to the central bank for N4.34 trillion to fund its fiscal financing gap.
The World Bank said in November that the Federal Government’s recourse to CBN’s overdraft facility had repeatedly exceeded the limit of five percent of the previous year’s fiscal revenues.
“The process of converting the CBN Ways and Means, which is the government’s overdraft at the Central Bank of Nigeria, into long tenor bonds is still ongoing, and related parties, that is, the monetary and fiscal authorities, are still in discussions,” Patience Oniha, director of DMO, said in April.