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Fact Check: Sanusi Was Wrong About Cbn’s Lending To Fg


SAN FRANCISCO, December 05, (THEWILL) – THEWILL can authoritatively report that Former Governor of the Central Bank of Nigeria (CBN) and Emir of Kano, Muhammadu Sanusi II was wrong in his allegations that the account of the Federal Government, domiciled at the Central Bank of Nigeria, was overdrawn to the tune of N4.7 trillion by the Buhari administration.

Sanusi made the allegations at a policy monitoring dialogue, hosted by Savannah Centre for Diplomacy, Democracy and Development, at Transcorp Hilton Hotel in Abuja, on Friday .

“CBN claims on the FGN now top N4.7 trillion — equal to almost 50 per cent of the FGN's total domestic debt,” he had said.

This is a clear violation of the Central Bank Act of 2007 (Section 38.2), which caps advances to the FGN at five percent of last year's revenues.

“The CBN-FGN relationship is no longer independent. In fact, one could argue their relationship has become unhealthy.

“Has CBN become the government's lender of last or first resort?

“I can't apologise for being who I am. The government I served, I did not keep quiet. When I am not serving the government, I cannot keep quiet.”

However, facts and figures from the CBN show that that the Federal Government did not borrow above its limit from the apex bank.

In fact, even the amount lent to the government by the CBN was N1.467 trillion, a far cry from what Sanusi claimed.

A Presidency fact sheet, obtained by THEWILL, show that inflows into the Federal Government's Treasury Single Account, TSA, as at December 2 stood at N4.4trillion while foreign exchange transfers into the account was N101.7 billion, giving a grand total of N4.574trillion.

The sheet also revealed that government spent N1.913trillion leaving a credit balance of N2.66 trillion in the TSA as at December 2, 2016.

In another account, the federal government had overdrawn the account to the tune of N1.468 trillion through ways and means as of December 2, which if netted off against the N2.66 trillion would give a net balance of N1.194 trillion.

Therefore, it is safe to say Sanusi's assertions are totally false and wholly fabricated except the Emir can release facts backing his assertions.

Meanwhile, CBN' Acting Director Corporate Communications, Isaac Okorafor, clarified that the CBN does not allocate dollars to end users but that request for foreign exchange is made through banks.

“First I want to state that the Central Bank of Nigeria has set up an inter-bank foreign exchange market where anyone who wishes to buy foreign exchange can bid for and buy through their banks. It is not true that CBN allocates dollars,” he said.

“There is nowhere in the world that the central bank sits by and allows vicious speculators to solely distort the value of its currency endlessly.

“All central banks intervene to buy or sell in the market to ensure that the local currency is protected from dubious attacks. The channels for advice and contribution of ideas on the current economic situation by all patriotic Nigerians are open.

“It is rather unfortunate that some people have chosen to play to the gallery and to make statements to disparage those in leadership at this time in total insensitivity to the larger interests of the Nigerian economy.

“We should not forget that the seed of our current economic crisis was planted by the failure of those who occupied public office in the past but failed to act in the long term interest of the Nigerian economy.

“It is always easier and the grass greener when people are out of office. The challenge we face today is a choice between pandering to the established interest in Nigeria's speculative economy and the protection of the wages of the real stakeholders who work hard on fixed incomes, for they are the core victims of Naira depreciation.

“At this critical time in the life of our country the CBN will continue to explore avenues with the Federal Government in order to find solutions to the current economic situation. Already Nigerians are waking up to the call to be more productive and to look inwards and to be less dependent on the importation of foreign goods and services.”

Story by Oputah David