The Governor, CBN, Mr. Godwin Emefiele, has addressed the concern raised by a member of the MPC, Dr. Adedoyin Salami, over the rise in the CBN’s financing of the government, which he noted was limiting private sector access to credit.
Salami, had in a communiqué no. 114, said monetary data showed a sharp rise in the extent of the CBN financing of the Federal Government’s 2016 deficit.
He had said the CBN had become a “piggy bank” in which over N1.5tn had been moved to service debt as of April 2017 from N3bn at the end 2016.
But reacting to the claim, Emefiele said the apex bank had not over-funded the activities of government.
He said, “Let me state categorically that the CBN has not over-funded the Federal Government. The Federal Government, on its own, decided that all its funds, both in local and foreign currencies, should be moved to the Central Bank of Nigeria, into the Treasury Single Account.
“It is important to put it in perspective. You as a customer of a central bank or any other bank, and you have fixed deposit in an account and for some reasons, you want spontaneous financing to meet your obligation.
“If you approach your bank to allow you to over-withdraw from your account temporarily, your bank will. So this have nothing to do with the CBN or any other bank. The assurance I will give to you is this: There is no truth in the issue of overfunding, because whatever is overdrawn is far less than what the Federal Government also has in its TSA.
“So basically, all this has to do with lack of understanding of the operations of the CBN.”