Fakoyejo OlalekanGovernor of the Central Bank of Nigeria (CBN), Godwin Emefiele, says the apex bank’s N23 trillion loan to President Muhammadu Buhari administration for cushioning the impact of Nigeria’s dwindling revenue should not be blown out of proportion.
According to Emefiele on Tuesday, 24 January 2023, the central bank acted in line with its responsibilities by constantly lending funds to government.
Join our WhatsApp ChannelHe said the government suffered a revenue decline due to COVID-19 and two recessions; as a result, the CBN acted as a last resort to provide capital for the government.
Recall that the N23 trillion loan obtained from the CBN has been criticised by the National Assembly. The upper and lower chamber blamed the Buhari government and the apex bank for not notifying the lawmakers before the credit was approved.
As a result, the lawmakers refused to restructure the loan into a bond after President Muhammadu Buhari requested approval to securitise the loan in a bid to cut the interest rate down to nine per cent and extend the repayment period to 40 years.
Defending the position of the central bank, Emefiele said: “the central bank is a banker to the government and also a lender of last resort to the government.”
“Because we are lender of last resort, it will be irresponsible for us to sit idle, it will be a dereliction of our duty as the lender of last resort to ignore the government and allow the economy and Nigerians to suffer,” He added.
Emefiele said the loan extended to the Federal Government through the ‘Ways and Means advances’ isn’t out of place, as central banks of countries around the world make similar decisions.
“What we did by lending to the government as lender and banker of last resort is normal in any part of the world particularly when countries face crises. Any central bank, any FED will do what we have done,” he explained.
The apex bank chief stated further that the CBN loan will be restructured since President Buhari has requested for approval, so people should stop exaggerating the purpose of the loan.
“So that we appeal to those who are exaggerating the purpose behind ways and means to take it easy with us and believe that by the special grace of God that since the president has written to the national assembly, we will eventually give the approval to allow CBN to securitize,” the CBN governor said.
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