CBN gov’s claim on Buhari printing N35tn not correct – ex-President’s aide

A former aide to President Muhammadu Buhari has pushed back against claims made by the Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, regarding the mismanagement of the economy during Buhari’s administration, particularly between 2015 and 2023.

The aide challenged the CBN governor’s assertion that N35 trillion was printed during Buhari’s tenure, clarifying that the actual figure was closer to N7.5 trillion.

The dispute arose following the release of new data by the CBN, which showed a significant increase in Nigeria’s money supply, rising by 14.22% to N107.1 trillion between January and August 2024, compared to N93.77 trillion in January of the same year.

At a recent press briefing held after the September meeting of the Monetary Policy Committee (MPC) in Abuja, Cardoso had stated, “In 2015, the money supply was about N19 trillion. By 2023, it had surged to N54 trillion. That’s a huge increase, and a substantial portion of that came through the Ways and Means financing.”

Cardoso explained that the N35 trillion printed over the period had resulted in excessive liquidity, with too much money chasing the same volume of goods, contributing to inflationary pressures.

The “Ways and Means” mechanism refers to the process by which the CBN lends money to the government. Cardoso noted that this type of funding was not supported by corresponding economic growth, leading to an oversupply of naira in the economy, which diminished its value.

However, Buhari’s aide, who chose to remain anonymous due to lack of authorization to speak on the matter, refuted Cardoso’s figures. The aide contended that during the eight-year period, the CBN had provided only N7.5 trillion in Ways and Means advances.

“The numbers being cited are simply not correct. When the acting Governor of the Central Bank was in office, the National Assembly summoned the CBN to provide accurate figures. The total sum of Ways and Means advances during Buhari’s tenure did not exceed N7.5 trillion,” he said.

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Citing a report from The Cable, the aide emphasized that the National Assembly had been expected to release a comprehensive report on the matter but had not yet done so. “The last we heard, they promised to release the report in September. The central bank’s official records support our figure of N7.5 trillion,” he added.

To back his claim, the aide referenced a letter addressed to the Senate Majority Leader by the CBN on January 16, 2023. The letter, which responded to inquiries from the Senate’s Special Committee on Ways and Means, detailed the figures involved.

The letter stated, “The balance of the Treasury Sub-Treasury Account as of December 19, 2022, was -22,719,7033,774,306.90. This account is the designated account for granting overdraft facilities to the Federal Government. We have attached a summary page that details the Ways and Means granted between 2015 and 2022 as Appendix 3.”

The Buhari administration grappled with numerous fiscal challenges between 2015 and 2023, including a drop in global oil prices and a reduction in oil revenue. To manage these difficulties, the government increasingly relied on the CBN to fund its expenditures, printing trillions of naira in the process.

Both Cardoso and Finance Minister Wale Edun have attributed the inflationary pressures and the weakened naira to this money printing, which was not accompanied by productivity growth, making basic goods and services more expensive for Nigerians.

Efforts to reach the CBN and other government officials for a response to the aide’s remarks were unsuccessful as of the time of filing this report.

Surge in Money Supply
Meanwhile, the CBN’s recent figures show that the money supply in the economy has surged by 14.22% from N93.77 trillion in January to N107.1 trillion in August 2024. Month-on-month, there was a 0.75% increase, rising from N106.3 trillion in July, while year-on-year, the supply increased by 65% from N64.8 trillion in August 2023.

Money supply (M2), which includes currency outside banks, narrow money, demand deposits, and quasi-money, reflects the growing liquidity in the Nigerian economy. In August 2024, currency outside banks was reported at N3.8 trillion, demand deposits at N31 trillion, and quasi-money surged to N72.2 trillion.

This increase in liquidity presents a challenge for the CBN’s Monetary Policy Committee as it seeks to balance economic growth with inflation control.

CBN gov’s claim on Buhari printing N35tn not correct – ex-President’s aide

(PUNCH)