The Central Bank of Nigeria (CBN) backstopped a total of N2.8 trillion in support loans to the Federal Government in 2020. This follows the FG’s failure to meet its revenue targets due to the impact of the fall in oil prices and covid-19 pandemic.
The support came in the form of Ways and Means, a provision in the CBN act that allows the government to borrow from the apex bank. Provisions in the act cap monetary financing of fiscal deficits at 5 percent of the prior year’s revenues.
This information was made known by the Minister for Finance, Zainab Ahmed during a public presentation of the 2021 FGN Approved Budget – Breakdown & Highlights which was done via Zoom, an online platform for virtual meetings.
According to the information contained in the report, the central bank provided financial support to the tune of N2.8 trillion which the government used to fund its budget expenditure. In the breakdown seen by Nairametrics, out of the 2020 budget deficit of N6.1 trillion, N2 trillion was sourced from domestic borrowing, and another N12 trillion from foreign borrowing. The rest was via Ways and Means.