The Federal Government’s net credit balance with the Central Bank of Nigeria (CBN) stands at N1.19 trillion as at last Friday, according to figures obtained by Daily Sun.
This is coming at a time when some eminent Nigerians have thrown their weight behind the CBN, in its efforts to stabilise the economy, against the position of ex-CBN governor and now Emir of Kano, Muhammadu SAnu$i II.
SAnu$i had, last week, stated that the account of the Federal Government with the CBN had been overdrawn to the tune of N4.7 trillion by President Muhammadu Buhari administration. He had declared: “CBN claims on the FGN now tops N4.7 trillion — equal to almost 50 per cent of the FGN’s total domestic debt. This is a clear violation of the Central Bank Act of 2007 (Section 38.2), which caps advances to the FGN at 5 percent of last year’s revenues.”
Fresh facts have, however, revealed that contrary to the Kano emir’s claim, the Federal Government’s Treasury Single Account (TSA) balance with the CBN, as at December 2, 2016, was N2.66 trillion. The Federal Government had overdrawn another account at the CBN by about N1.47 trillion by December 2, 2016 also, leaving a net balance of over N1.19 trillion credit.
It was gathered that inflow into TSA by December 2, was N4, 473 trillion, with forex transfer of 101.70 million, bring the grand total to N4, 574 trillion. The Federal Government made expenses of N1, 913 trillion, leaving a credit balance of N2, 661 trillion. The Federal Government had borrowed N1, 467 trillion, which was netted out from N2, 661 trillion credit, bringing the net balance to N1, 193 trillion.
Justifying this, a source at the CBN said: “If a customer with XYZ Bank Limited has N100 in one account but has also borrowed N35 from XYZ Bank Limited. Even if the bank were to demand that this customer pays off all his debt to them, he can do so and still have N65 balance with the bank. How is this a problem?”
The source, therefore faulted SAnu$i’s conclusion that the CBN’s claims on the FG were over N4.7 trillion.
In a related development, eminent Nigerians have expressed support for the CBN in the raging controversy.
The Ebonyi State Governor, Mr. Dave Umahi, praised the apex bank’s governor, Mr. Godwin Emefiele, for managing the economy of the nation well, in the face of global dwindling of resources occasioned by plummeting oil prices.
“Events like the global recession is not only peculiar to Nigeria and you have done well to manage the state of the nation’s economy,” he told Emefiele.
Umahi said people that want to pull Nigeria down are those criticising the CBN, insisting that the state governors knew that without the assistance of President Buhari and the goodwill of the CBN governor to drive the economy, they would have been in crisis.
“You have honestly shown your commitment and selfless services to our nation,” he also told the CBN governor.
The national Chairman of the All Progressives Congress APC, John Odigie-Oyegun, said borrowing was inevitable in view of the current economic realities in the country. He explained that Nigeria must borrow to invest in infrastructure and grow the economy.
The APC Chairman, who spoke on Sunday night after receiving a lifetime achievement award from Warri Choral Society, during a classical music concert in Lagos, gave assurance that the borrowings would not be used to pay salaries:
“If you read the newspapers, you hear the president being advised to pump money into the economy. So the question is, where is the money coming from? Simple! It has to come from somewhere including borrowing — both internal and external. To get this country going again, you have to pay contractors. Some contractors have not been paid for four, five, six, 10 years.
“So long as the borrowing is done not to pay salaries, which the President Buhari administration will not do, but invested to create opportunities, solve our problems of power and things like that no problem; to allow people to have money to consume, to buy goods, to pay for services so that factories can produce. So it is that cycle. We must kick-start the economy and to kick-start it will need money, lots of money”.
Also , the Minister of Agriculture, Chief Audu Ogbe, has described Emefiele, as revolutionary in his economic management strategy.
According to Ogbe, the CBN governor has etched his name in the annals of Nigeria’s economic management history as revolutionary, with the rice revolution he started across the country.
The minister disclosed that there had been tremendous pressure on the government to import rice in order to meet the demand for the commodity, which was an indication that those mounting such pressure never believed that the ABP was working.
He said that it does not make any economic sense to continue to spend scare foreign exchange resources on rice importation, when the country has huge potential to grow rice in commercial quantity, noting that each ship load of rice imported into the country displaces 12, 000 farmers from employment.
