In a significant financial maneuver, the Central Bank of Nigeria (CBN) extended a fresh N3.8 trillion in Ways and Means to the federal government during the last six months of 2023. According to CBN data for the fourth quarter of 2023, the total figure surged to N8.2 trillion in December from N4.4 trillion at the end of June 2023.
The Ways and Means balances, amounting to N26.95 trillion as of May 2023 when the Tinubu administration assumed office, were later securitized and included as part of the federal government’s domestic debt profile. However, by the end of June 2023, the balance had reduced to N4.36 trillion, suggesting a potential transfer of prior month balances to the Debt Management Office.
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Starting from July 2023, the balances witnessed a steady increase each month, rising to N4.5 trillion in July, followed by N5.1 trillion in August, surpassing the N5.1 trillion mark for the first time. Notably, September recorded the largest additional borrowing for a month, reaching a total of N6.4 trillion, with approximately N1.3 trillion added.
The upward trajectory continued, with the total climbing to N7.2 trillion in October before marginally increasing to N7.6 trillion in November. As the year drew to a close, December witnessed a significant surge, with the total hitting N8.21 trillion, indicating an 88 percent increase in Ways and Means over the span of six months.
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As per Section 38 of the CBN Act, 2007, the apex bank has the authority to grant temporary advances to the Federal Government to address temporary deficiencies in budget revenue, determining the interest rate for such advances.
The extension of N3.8 trillion in Ways and Means underscores the complex financial dynamics at play and highlights the measures undertaken by the CBN to support the federal government amidst fiscal challenges. As stakeholders navigate through these financial intricacies, close attention to regulatory frameworks and prudent financial management remains crucial for ensuring economic stability and sustainability.