There’s no doubt that, besides the nation’s economic challenges, typfied by the crash of the oil prices at the international market since 2015,which resulted in the drifting of economy into recessions, the Covid-19 pandemic may have worsened the situation, which some analysts say are being exploited.
The consequences are the rising debt profile of the country and dependence of government on the Central Bank of Nigeria for funding through ways and means.
While we have to contend with deficit budgets with higher percentage for debt servicing, Central bank financing of the Nigerian government has tripled since 2015.
Specifically, the government has become dependent on central-bank (CBN) borrowing and will struggle to wean itself off the copious money printing that has raised concerns about the health of Africa’s largest economy.
After revenues collapsed during the oil shock of 2015, Africa’s largest crude producer turned to the central bank, borrowing about a third of its debt from the apex lender to cover a budget deficit that has tripled during the same time.According to Bloomberg, those loans, cheap and easily available, were not clearly reflected in the fiscal accounts and raised alarm bells at the International Monetary Fund and World Bank.