The Central Bank of Nigeria’s advances to the federal government rose 2900 per cent in the last seven years to N23.8 trillion, an unprecedented rise that violated the law, stoked inflation and worsened the country’s debt burden.
Central banks sometimes help governments to fund budget deficits, but such loans, called Ways and Means Advances, are tightly controlled as they can fuel inflation and distort monetary policy.
In May 2015 when the Buhari administration came to office, the CBN’s loans to the federal government stood at N789.7 billion cumulatively. Since then, the government has drawn central bank loans each year at an unprecedented level.
