Breaking: CBN Ways and Means lending to FG now N10 trillion ($25 billion)


The Federal Government of Nigeria is owing to the Central Bank of Nigeria a whopping sum of about N10 trillion circa $25 billion. This is according to the Director-General of the Debt Management Office, Patience Oniha.

She mentioned this at an ongoing Zoom meeting with investors and analysts. According to her, the debt will be converted into bonds by the CBN perhaps ending one of the longest borrowing sprees on record from the CBN Ways and Means.

Recall that following Federal Government’s failure to meet its revenue targets due to the impact of the fall in oil prices and COVID-19 pandemic, the Central Bank of Nigeria (CBN) gave a total of N2.8 trillion in support loans to FG in 2020.

At N2.8 trillion, the CBN basically lent the government 52.8 per cent of its current year revenues or 62.2 per cent of 2019 revenues of N4.5 trillion.

However, the FGN’s new borrowing from the CBN has repeatedly exceeded that limit in recent years, and reaching about 80per cent of the FGN’s 2019 revenues in 2020, some analysts say, appears to violate the CBN Act, that the outstanding amount should not exceed five per cent of prior years’ actual revenue.

Prior to the implementation of the 2021 budget, Fitch Ratings estimates that the balance of the government’s WMF with the CBN was around N9.8 trillion (6.7 per cent of GDP) at end-2019, up from N5.4 trillion (4.2 per cent of GDP) at end-2018. Some analysts believe it is even higher than that.

In a report, Fitch Global rating agency expressed concern over this development, warning the Federal Government against repeated recourse to this window. It said “sustained use of direct monetary financing could raise risks to macroeconomic stability – given the current weak institutional safeguards – but we expect the FGN to reduce its use of the facility in 2021.”


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