The Federal Government plans to spend N1.2tn on servicing the loans it got from the Central Bank of Nigeria through the Ways and Means Advances, findings by The PUNCH have shown.
The 2023 fiscal framework document obtained by our correspondent showed that the Federal Government allocated N6.31tn to service its total debts.
A breakdown showed that the Federal Government allocated approximately N3.3tn to service domestic debts, N1.81tn for foreign debts and N1.2tn for ways and means.
The document also showed that this was the first time the Federal Government was making a budgetary allocation for ways and means.
Federal Government paid interests of N4.12tn between 2019 and 2022 on its borrowings from the CBN.
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.