CBN replies Sanusi, says TSA inflows cover govt’s borrowings

CBN

Central Bank of Nigeria (CBN) yesterday
debunked its former Governor and now Emir of Kano, Muhammadu Sanusi’s II
claim last week that the Federal Government, under the President
Muhammadu Buhari’s administration had overdrawn on its account with the
apex Bank to the tune of
N4.7 trillion.

Supporting its defence with data, the CBN, also the banker to the
government, insisted that government still had a net balance of over
N1.19 trillion in its Treasury Single Account (TSA) and declared
Sanusi’s claims as “totally false and wholly fabricated.”
TSA is a financial policy introduced by the federal government in
2012, to consolidate all inflows from the country’s ministries,
departments and agencies (MDAs) by way of deposit into commercial banks,
traceable into a single account at the CBN
Quoting Section 38.2 of the CBN Act 2007, Sanusi had maintained that
the Central Bank, a lender of last resort, had exceeded its lending
limit to the government, a development he noted had weakened the credit
worthiness of the country by the international community.Speaking at a
policy monitoring dialogue hosted by Savannah Centre for Diplomacy,
Democracy and Development, at in Abuja last week, Sanusi said the CBN’s
lending to the government since Buhari came in had spiked from about
N1.5 trillion to over N4.5 trillion.
Sanusi also said: “The CBN-FGN relationship is no longer independent.
In fact, one could argue their relationship has become unhealthy. CBN
claims on the FGN now top N4.7 trillion equal to almost 50% 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% of last
year’s revenues. Has CBN become the government’s lender of last or first
resort?”
In his opinion, no one was willing to lend to the Nigerian
government, noting, “If the Senate approved, I want to see who will lend
you $30billion when you have five exchange rates.”
cbn-table
But in defence of its transaction with the government, in a statement
made available to The Guardian in Lagos, the CBN said: “Contrary to his
claims, the Federal Government’s Treasury Single Account (TSA) balance
with the CBN as of 2nd December 2016 was N2.66 trillion (credit). In
line with practices that even Emir Sanusi presided over, the FG has
overdrawn another account at the CBN by about N1.47 trillion (debit) as
of 2nd December 2016.
“In effect, therefore, the net balance of the FG at the CBN is over N1.19 trillion (credit), as shown in Table.
Despite the Emir’s seeming knowledge of these situations, the CBN
wondered how “could Sanusi have reached the conclusion that the CBN’s
claims on the FG are over N4.7 trillion? Where did he get this number?”
But Sanusi had argued that “the problem of the current government is not
having the right policies to fix the current economic woes,” adding
that the country is enmeshed in heavy debts, as out of every N1 Nigeria
makes, 40 kobo goes to debt and 60 kobo is left for salaries, health,
education, power, infrastructure.
He had argued that oil revenue is merely a working capital that
cannot make the country rich, noting that while Nigeria produces one
barrel for 80 Nigerians; Saudi Arabia produces one for three Saudis.
Besides, he noted that in every economic growth is driven by
“consumption, investment and net export”, adding that “our exports
cannot grow, without regulatory certainty or an increase in the price of
oil.”
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