HomeBUSINESSFG Spends N912.32bn to Service CBN Loan in Three Months

FG Spends N912.32bn to Service CBN Loan in Three Months

The Federal Government has found itself shackled by the weight of mounting interest payments in the first quarter of 2023. 

Astonishingly, a staggering N912.32 billion was shelled out to service loans acquired from the Central Bank of Nigeria via Ways and Means Advances, as revealed in the Q1, 2023 Budget Implementation Report by the Budget Office of the Federation. 

This amount spent on this loan is 161.47 per cent higher than the previous year’s Q1 expenditure of N348.92 billion. 

As previously reported, the government had laid out ambitious plans to allocate N1.2 trillion to service these CBN loans, translating to approximately N300 billion per quarter. 

Yet, they’ve already exhausted a whopping 76.03 per cent of this budget allocation within the first quarter.

Ways and Means Advances, a loan facility wielded by the central bank to bridge temporary budget shortfalls, is now looming as a financial setback, ensnaring the nation’s resources. 

Even as Section 38 of the CBN Act, 2 of 007, attempted to place restrictions by capping the Federal Government’s borrowing at five per cent of the previous year’s revenue, past administrations flouted this limit. 

However, the 9th National Assembly, in the face of public outrage, controversially amended the CBN Act, expanding the ceiling force and Means Advances from five to a staggering 15% of the Federal Government’s prior year’s revenue.

This shift in policy marks a profound turning point in Nigeria’s financial landscape, sparking debates and concerns about the consequences of such monumental borrowing. 

As the government treads this risky path, the nation watches with bated breath, pondering the long-term ramifications of its financial decisions.

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