Saturday, 07 October 2023 04:53

FG spent N912bn to service CBN Ways & Means advances in 3 months

Rate this item
(0 votes)

Federal Government paid an interest of N912.32bn in the first quarter of 2023 on the loans it got from the Central Bank of Nigeria through Ways and Means Advances.

This amount was stated in the Q1, 2023 Budget Implementation Report by the Budget Office of the Federation.

The amount spent paying interest on this loan is 161.47 per cent higher than the N348.92bn spent in the same quarter of 2022.

As earlier reported, the Federal Government planned to spend N1.2tn on servicing the loans it got from the CBN through the Ways and Means Advances.

This meant that the government planned to spend about N300bn quarterly.

However, it had spent about 76.03 per cent of its budget for the interests on the ways and means advances.

Ways and Means Advances is a loan facility used by the central bank to finance the government in periods of temporary budget shortfalls subject to limits imposed by law.

According to Section 38 of the CBN Act, 2007, the apex bank may grant temporary advances to the Federal Government with regard to temporary deficiency of budget revenue at such rate of interest as the bank may determine.

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.

“All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted, and if such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid.”

The Act placed a limit of five per cent on how much the Federal Government could borrow, although the previous administration severely violated the limit.

However, the House of Representatives of the 9th National Assembly, amid protest, approved an amendment to the CBN Act, raising the ceiling of Ways and Means Advances from the apex bank from five to 15 per cent of the Federal Government’s previous year’s revenue.

The House gave the approval at an emergency sitting, in concurrence with the Senate, which held an emergency plenary to consider and approve some economic bills.

The National Assembly made the move amid criticisms that the Federal Government had obtained WMAs beyond the five per cent threshold of the CBN.

 

Punch

November 01, 2024

Credit to government jumps 90 percent to N42trn as money supply rises, CBN reports

Banks’ credit to the government surged to a record N42 trillion in September 2024, amid…
October 31, 2024

Rivers’ funds: ‘Elements loyal to Tinubu govt pulling strings from behind the scenes - Atiku

As reactions continue to trill the judgement of a Federal High Court in Abuja on…
October 31, 2024

The No. 1 misconception about failing

Aditi Shrikant There are few massive success stories that didn’t start out with some sort…
October 12, 2024

Woman becomes Police officer to catch father’s killer, arrests him 25 years after

A Brazilian woman who dedicated her life to catching her father‘s killer managed to finally…
October 27, 2024

That simple 'hi' text from a stranger could be the start of a scam that…

“Pig butchering" operations run out of Asia but target victims globally, with scammers promising love…
November 01, 2024

Here’s the latest as Israel-Hamas war enters Day 392

Rocket fire from Lebanon kills 7 in Israel as US officials try to push for…
October 16, 2024

The AI revolution: How Predictive, Prescriptive, and Generative AI are reshaping the world

Bernard Marr In the ever-evolving landscape of artificial intelligence, three powerful forces are reshaping our…
October 27, 2024

Nigeria awarded 3-0 win over Libya after airport fiasco

Nigeria have been awarded a 3-0 victory over Libya, and three vital points, from their…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2024 NewsScroll. All rights reserved.