World Bank Raises Alarm, Says CBN Loan Repayments To Gulp 62% Of Revenue
The World Bank has projected that interest payments on the Nigerian Government’s borrowing from the Central Bank of Nigeria (CBN) will gulp about 62 percent of government revenue by 2027 despite the restructuring plan.
The Washington-based bank made this known in its December 2022 edition of the Nigeria Development Update recently released, Naija News reports.
The report read in part, “Despite the restructuring of the Ways and Means stock in 2023, interest payments are projected to steadily increase by 2.4 percentage points of GDP between 2018 and 2027, and by 2027 interest payments will account for over 62 percent of revenues.”
Recall that the Federal Government borrowed N6.31tn from the CBN through Ways and Means Advances in 10 months. This pushed the Federal Government’s borrowing from the CBN from N17.46tn in December 2021 to N23.77tn in October 2022.
The N23.77tn owed to the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N44.06tn in the third quarter of 2022, according to the Debt Management Office.
The public debt stock only includes the debts of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory.
Also, the World Bank had, in November last year, warned the Nigerian government against financing deficits by borrowing from the CBN through the Ways and Means Advances, saying this put fiscal pressures on the country’s expenditures.
Despite warnings from experts and organizations, the Federal Government has kept borrowing from the CBN to fund budget deficits.
The Federal Government paid an interest of N2.03tn from January 2020 to November 2021 on the loans it got from the CBN through the Ways and Means Advances.
It was also reported that the Federal Government paid an interest of N405.93bn from January 2022 to April 2022 on the loans it got from the CBN.