Africa
EXPOSED: How Buhari Borrowed ₦14.86 Trillion From CBN In Six Years
- Government borrowing from the central bank rose to ₦3.31 trillion in 2017, representing an increase of ₦1.08 trillion. Buhari further borrowed ₦2.1 trillion in 2018 to take total borrowing to N5.41 trillion.
A new report from the Central Bank of Nigeria (CBN) has revealed that President Muhammadu Buhari-led’s administration has borrowed a total sum of ₦14.86 trillion ($2.82 Billion) from the CBN through Ways and Means Advances since the administration came to power in May 2015.
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The Federal Government’s total debt from the CBN stood at ₦648.26 billion as of June 2015, a month after President Buhari was sworn in. The debt rose to ₦856.33 billion by December 2015 and ₦2.23 trillion by December 2016, the CBN data has shown.
What is 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.”
Government borrowing from the central bank rose to ₦3.31 trillion in 2017, representing an increase of ₦1.08 trillion. Buhari further borrowed ₦2.1 trillion in 2018 to take total borrowing to N5.41 trillion.
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This continued in 2019 as the Federal Government took another ₦3.31 trillion loan from the CBN to hit ₦8.72 trillion in debt.
In 2020 during COVID-19, the Federal Government borrowed ₦4.9 trillion to plug its fiscal financing gap, bringing government’s total borrowing to ₦13.11 trillion.
In the first half of 2021, the Federal Government borrowed an additional ₦2.4 trillion from the apex bank to take its total borrowing to ₦15.51 trillion (₦13.11 trillion plus ₦2.4 trillion).
However, deducting the ₦648.26 billion debt met by President Buhari from the total debt of ₦15.51 trillion revealed that Buhari’s administration has borrowed ₦14.86 trillion in the last six years.
Experts have warned that Federal Government abuse of Ways and Means Advances stipulated at five percent of the previous fiscal revenues could raise risks to macro-stability in the context of weak institutional safeguards that preserve the credibility of policymaking and the ability of the central bank to control inflation.
“The CBN’s guidelines limit the amount available to the government under its WMF to five per cent of the previous year’s fiscal revenues. However, the FGN’s new borrowing from the CBN has repeatedly exceeded that limit in recent years, and reached around 80 per cent of the FGN’s 2019 revenues in 2020,” Fitch Ratings stated in January 2021.
However, deducting the ₦648.26 billion debt met by President Buhari from the total debt of ₦15.51 trillion revealed that Buhari’s administration has borrowed ₦14.86 trillion in the last six years.
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