CBN ‘Ways and Means’ loan to the FG rise to N20 trillion as of June 2022 – Nairametrics

CBN Gov. Godwin Emefiele and President Buhari
The Central Bank of Nigeria has extended a total sum of N19.9 trillion circa (N20 trillion) in loans to the Federal Government under its Ways and Means provision as included in the CBN Act.
The Ways and Means provision allows the government to borrow from the Apex Bank if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
Provisions in the act cap monetary financing of fiscal deficits at 5% of the prior year’s revenues.
However, since the government started experiencing a significant shortfall in revenue, it has relied heavily on the central bank to finance its expenditure programs via Ways and Means.
According to data from the Central Bank of Nigeria, the Ways and Means balance at the end of 2021 was N17.4 trillion at the end of 2021 but has now risen to N19.9 trillion as of June 2022.
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The Ways and Means of the Central Bank has been rising because the Federal Government has not been able to meet its revenue projections
According to the central bank’s 2020 credit policy, it stated that “Ways and Means Advances shall continue to be available to the Federal Government, to finance deficits in its budgetary operations to a maximum of 5.0% of the previous year’s actual collected revenue. Such advances shall be liquidated as soon as possible, and shall in any event be repayable at the end of the year in which it was granted.” 
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