FG borrows N2.45tn from CBN in half-year, owes nearly N20tn
The Federal Government borrowed N2.46 trillion from the Central Bank of Nigeria in the first half of this year as it continued to struggle to generate enough revenue to meet its financial obligations, 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 N19.91 trillion in June from N17.46 trillion at the end of last year.
Last week, the Federal Government revealed that its revenue exceeded debt service costs in the first four months of this year.
Its retained revenue was N1.63 trillion, less than half of the N3.32 trillion budgeted for the period, but it spent N1.94 trillion on servicing debts.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said despite higher oil prices, oil revenue underperformed due to “oil production shut-ins resulting from pipeline vandalism and crude oil theft; and high petrol subsidy cost due to higher landing costs of imported products.”
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 N2.04 trillion in the first quarter of this year to N N41.60 trillion, 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 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.
