The Federal Government paid interests of N4.12tn between 2019 and 2022 on the loans it got from the Central Bank of Nigeria through Ways and Means Advances, according to findings by The PUNCH.
Data from the Medium-Term Expenditure Framework and Fiscal Strategy Papers and the public presentation documents of the approved budgets by the Ministry of Finance, Budget and National Planning.
An analysis by The PUNCH showed that in 2019, the interest paid on the CBN loans was N339.45bn.
The interest payments rose to N912.57bn in 2020 and N1.22tn in 2021.
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.