The Federal Government of Nigeria paid an interest of N912.32bn in the first quarter of 2023 on the loans it got from the Central Bank of Nigeria (CBN) through Ways and Means Advances.
This amount was stated in the Q1, 2023 Budget Implementation Report by the Budget Office of the Federation.
It was gathered that the amount spent paying interest on the loan was 161.47% higher than the N348.92bn spent in the same quarter of 2022.
Ways and Means Advances was a loan facility used by the CBN to finance the government in periods of temporary budget shortfalls subject to limits imposed by law.
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According to Section 38 of the CBN Act, 2007, the apex bank may grant temporary advances to the Federal Government about temporary deficiency of budget revenue at such rate of interest as the bank may determine
The Act placed a limit of five per cent on how much the Federal Government could borrow, although the previous administration severely violated the limit.
However, the House of Representatives of the 9th National Assembly approved an amendment to the CBN Act, raising the ceiling of Ways and Means Advances from five to fifteen per cent of the Federal Government’s previous year’s revenue.
