The Federal Government paid interests of N4.12tn between 2019 and 2022 on the loans it got from the Central Bank of Nigeria through Ways and Means Advances, according to findings by The PUNCH.
Sami Olatunji, Tope Omogbolagun and Leke BaiyewuThe Federal Government paid interests of N4.12tn between 2019 and 2022 on the loans it got from the Central Bank of Nigeria through Ways and Means Advances, according to findings byData from the Medium-Term Expenditure Framework and Fiscal Strategy Papers and the public presentation documents of the approved budgets by the Ministry of Finance, Budget and National Planning.The interest payments rose to N912.57bn in 2020 and N1.22tn in 2021.
The Act read in part, “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government. “The direct consequence of central banks’ financing of deficits are distortions or surges in the monetary base leading to adverse effects on domestic prices and exchange rates i.e macroeconomic instability because of excess liquidity that has been injected into the economy,” it said.
It said that the government had always under-budgeted for debt service as the government failed to consider the cost of ways and means financing in its debt service allocation.
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