FG spends N4.83 trillion from bonds, treasury bills to pay back CBN loan

The Federal Government (FG) has taken out about N4.83 trillion from the proceeds of Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 to pay back the Ways and Means Advances from the Central Bank of Nigeria (CBN).

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, revealed this during his presentation at the Lagos Business School (LBS) Breakfast Club.

The FG seems has formed a pattern of borrowing and debt servicing, creating what could be termed as a financial carousel.

Recall that in the latter half of 2023, the FG acquired N2.94 trillion from the CBN through Ways and Means Advances.

This borrowed money was said to be for servicing of its domestic debts, signifying that the government had to resort to borrowing from the apex bank to fulfil its obligations to domestic debt holders.

The government currently has pivoted to utilising the proceeds from public domestic debt—garnered through the issuance of Nigerian Treasury Bills (NTBs) and Bonds—to offset the substantial loan obtained from the CBN.

This proves that a cyclical borrowing strategy that sees new debt being used to service existing obligations.

By managing debt in this way, many people have expressed worry about whether FG's fiscal approach is sustainable.

BEB