FG’s debt to CBN hits N22.07trn

The federal government has collected another N4.6 trillion loan from the Central bank of Nigeria (CBN) , data from Debt Management Office (DMO) has shown.

This brings the total Federal government borrowing from the CBN through Ways and Means Advances to N22.07 trillion (about $47billion) as of August 2022, compared to N17.4 trillion it stood as at the end of December 2021.

Ways and Means Advances (WMA) is a temporary loan facility used by the Central Bank to finance the Federal Government in periods of temporary budget shortfalls subject to limits imposed by law.

The Budget office also revealed that the federal government paid N714.74 billion in interest on the loan from January to June 2022.

The interest captured is N127.18 billion (21.65 per cent) more than the N587.56 billion that the government paid as interest on its borrowings from the apex bank in 2021.

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A breakdown shows from April to June 2022 alone, the FG interest payment on Ways and Means Advances amounted to N365.82 billion, which the report said, did not have any budgetary provision in the review period.

Part of the report reads: “Total Debt Service in the first half of 2022 stood at N2,597.85 billion, higher than the prorated sum of N1,978.04 billion by N619.81 billion (31.33 percent). Interest on Ways and Means amounted to N714.74 billion.

“The sum of N1,333.41 billion was used for domestic debt servicing, a difference of N52.34 billion (4.09 percent) from the prorated half year projection, while N549.70 billion was spent on external debt servicing during the period under review.”

Additionally, the report said: “Total Debt Service in the second quarter of 2022 stood at N1,351.90 billion indicating an increase of N362.88 billion (36.69 percent) above the N989.02 billion projected for the quarter. This was mainly a result of the N365.82 billion paid as interest on Ways and Means, which did not have any budgetary provision in the review period.

“A total of N664.73 billion was used to service FGN domestic debt during the quarter. This indicates a difference of N24.19 billion (3.78 per cent) below the prorated quarterly estimate.

“The prorated sum of external debt service was N280.81 billion during the quarter under review. Actual external debt service payment however amounted to N321.36 billion (US$597.95 million) indicating a difference of N40.55 billion (14.44 percent) above the prorated sum.”