The Federal Government’s indebtedness to the Central Bank of Nigeria (CBN) through the Ways and Means Advances program has experienced a substantial reduction, falling to N4.36 trillion, with most of it undergoing restructuring in June 2023, according to provisional data from the CBN’s quarterly statistical bulletin for the second quarter of 2023.
Notably, the loan had surged by N3.42 trillion in a mere five months, soaring from N23.53 trillion in December 2022 to N26.95 trillion in May 2023.
It was reported that the Federal Government paid a substantial interest of N912.32 billion in the first quarter of 2023 on loans obtained from the CBN.
The Q1, 2023 Budget Implementation Report from the Budget Office of the Federation disclosed this figure.
The interest payment for the loan in that quarter represented a significant 161.47 percent increase compared to the N348.92 billion spent in the same quarter of 2022.
As previously reported, the Federal Government had initially earmarked N1.2 trillion for servicing the loans secured from the CBN through Ways and Means Advances.
This equated to approximately N300 billion each quarter.
However, it transpired that the government had already expended approximately 76.03 percent of its allocated budget for interest on the Ways and Means Advances.
Ways and Means Advances is a loan mechanism utilized by the CBN to provide financial support to the government during periods of temporary budget shortfalls, subject to legal limitations.