FG Received Extra N3.8 Trillion Loan From CBN Between July-December 2023

FG received a further N3.8 trillion Ways and Means loan from CBN between July and December 2023

The Federal Government of Nigeria received an additional N3.8 trillion in what looks to be new Ways and Means Borrowing in the final six months of 2023, according to information released by the Central Bank of Nigeria, CBN.

Provisional data for the fourth quarter of 2023 was disclosed in the CBN's most recent Statistics Bulletin.

The government's entire outstanding Ways and Means balance as of December 2023 was N8.2 trillion, up from N4.4 trillion at the end of June 2023, according to the CBN's preliminary figures.

This significant increase in Ways and Means balances suggests otherwise, contrary to allegations that President Bola Tinubu's administration has not borrowed money from the CBN, and in line with assertions made by Wale Edun, the Coordinating Minister of the Economy and Minister of Finance.

The CBN can provide the government with emergency or short-term finance to meet cash flow shortfalls through the use of ways and means provisions.

Ways and Means balances totaled N26.95 trillion when the Tinubu administration took office in May 2023. Nevertheless, these amounts were later securitized and incorporated into the domestic debt profile of the federal government.

The debt ballooned to N6.4 trillion by September 2023, the highest growth in borrowing in a single month at almost N1.3 trillion.

According to a preliminary analysis of the data, at the end of June 2023, the balance had dropped to N4.36 trillion, suggesting that the funds from the previous month may have been transferred to the Debt Management Office.

The balances had monthly increases that were continuous starting in July 2023. It hit N4.5 trillion in July and then N5.1 trillion in August, the first time it went beyond the N5.1 trillion level.

It then increased to N7.2 trillion in October and then increased marginally to N7.6 trillion in November.

The sum reached N8.21 trillion at the end of December 2023, signifying an 88 percent rise in Ways and Means balances over a six-month period.

Through Ways and Means Advances, the Federal Government has previously received around N2.94 trillion from the CBN.

This was set aside for the payment of its domestic debts, therefore in order to pay its debt holders, the government was forced to borrow money from the CBN.

Also, it was revealed that the Ways and Means Advances from the CBN will be settled with an estimated N4.83 trillion from the revenues of Nigerian Treasury Bills, NTBs, and Bonds issued in 2024 by the Federal Government.

The National Assembly gave its approval in 2023 for the N22.7 trillion securitization of the N23.3 trillion that the CBN had previously advanced to the Federal Government through ways and means.

The debt was then moved to the Debt Management Office (DMO) with a tenor of forty years, a moratorium of three years, and an interest rate of nine percent.

As per Section 38 of the CBN Act, 2007, the Federal Government may get temporary advances from the Apex Bank in case of a temporary shortfall in budgetary revenue, at the bank's discretionary interest rate.