The practice of printing money to fund federal government expenditure is expected to continue under the administration of Nigeria’s President-elect Bola Tinubu following the upward review of the amount the government can borrow from the Central Bank, analysts told BusinessDay.
The Senate convened Saturday to amend the Central Bank of Nigeria (CBN) Act 2004, to increase the borrowing threshold for the Federal Government from 5 percent to 15 percent, under the Ways and Means borrowing plan.
The incoming Tinubu administration will also come under pressure in its first few months as it seeks funding to meet the expenditure remnants of the previous administration. This perhaps explains why there is pressure to open the CBN’s vault to borrow even more money,” an economist who pleaded anonymity told BusinessDay.
Oluseun Onigbinde, co-founder of BudgIT, a Nigerian civic startup said ‘Ways and Means’ financing has been converted to a budget funding instrument as opposed to the liquidity support it was intended to be.
“We might continue on this irrecoverable slope where the apex bank is fully degraded to a mere federal government parastatal,” Onigbinde said in a note seen by BusinessDay.
