CBN prints over N21trn for president Buhari to spend, more expected before 2023

Despite high oil prices, the federal government has requested from the Central bank of Nigeria another N4.6 trillion in the first seven months of 2022.

The figure is contained in the latest debt breakdown published by Debt Management Office, Punch reports.

Analysis shows that the new funding brings the total direct funding of CBN to the Federal government through Ways and Means Advances to N22.07 trillion (about S47billion) as of August 2022.

This is a massive jump when compared to N17.4 trillion at the end of December 2021.

It is even crazier when one looks back and realised that as of 2015 when President Muhammadu Buhari came to power, the Federal government debt to CBN stood at N789. 67 billion.

In effect, the CBN has been printing money seriously to fund the government’s spending amid revenue challenges.

How does CBN fund FG?

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

Expert reacts to CBN funding

Reacting to CBN's funding of government needs, Dr Doyin Salami, a renowned economist and former member of CBN's Monetary Policy Committee (MPC) said the CBN was providing a “piggy-bank” service to the federal government.

He warned that CBN must balance out the increased government lending if it wants to fight inflation.

Similarly, Economist Intelligence Unit, EIU in a recent note urged CBN to stop the printing of money for government spending.

Part of the note reads: "Building credibility in the target rate (of inflation) has not been a priority in recent years.

The continued printing of money at the same time as tightening policy would prevent effective control of the price level”