The Federal Government’s debt to the Central Bank of Nigeria (CBN) has decreased to N4.36tn after a significant portion of it was restructured in June 2023, according to provisional data from the CBN’s quarterly statistical bulletin for the second quarter of 2023.
However, it is worth noting that this debt increased by N3.42tn in just five months, rising from N23.53tn in December 2022 to N26.95tn in May 2023.
In the first quarter of 2023, the Federal Government paid N912.32bn in interest on the loans it received from the CBN, as stated in the Q1, 2023 Budget Implementation Report by the Budget Office of the Federation.
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This amount represents a 161.47% increase compared to the N348.92bn spent in the same quarter of 2022.It is important to recall that the Federal Government had planned to allocate N1.2tn to service the loans obtained from the CBN through Ways and Means Advances.
This meant that the government intended to spend approximately N300bn per quarter. However, it has already spent 76.03% of its budget for interest payments on these advances.
Ways and Means Advances is a loan facility provided by the CBN to support the government during temporary budget shortfalls, with limits imposed by law.