Banks’ credits to the government rose by N3.77tn in the first two months of 2023.

Figures obtained from the Central Bank of Nigeria revealed that the total government credit which ended December 2022 at N24.66tn rose to N28.43tn as of the end of February 2023.

The CBN disclosed in its ‘Money and credit statistics’ report that the credit rose from N14.9tn as of the end of January 2022 to N26.65tn in the corresponding period of 2023.

According to statements released by the CBN, a member of the Monetary Policy Committee, Aliyu Sanusi, said at the January meeting that tightening of the rates was needed to moderate the effects of election-related spending and the liquidity associated with the proposed government borrowing in 2023.

He also said that the key drivers of the NDA was net claims on government which grew by 78.15 per cent (y-t-d) in December 2022, which in turn was driven by FGN’s borrowing from the central bank (93.21 per cent), commercial banks (44.26 per cent) and non-interest banks (79.13 per cent).

“This suggests that monetary and fiscal factors have continued to play an important role in the current inflationary processes,” he said.

Another MPC member, Adeola Adenikinju, said, “The World Bank forecast Nigeria’s real GDP growth to decline to 2.9 per cent in 2023.

“The slow growth is because of the effects of flooding, the tight fiscal space and rise in borrowing costs, security challenges and moderation in oil prices.”