The Federal Government has within a period of four months spent over N2 trillion, the Central Bank of Nigeria (CBN) has said.
The CBN also disclosed that between December 31, 2012 and April 30, 2013 government increased its borrowing in securities by about N700 billion and reduced its savings with the CBN and deposit money banks (DMBs) by about N1.4 trillion.
Sanusi Lamido Sanusi, CBN governor, said these while trying to explain why interest rate could not be reduced from the level it is at the moment.
“We have been under a lot of pressure to reduce interest rate. We try to explain that it simply did not make sense. If you look at inflation numbers today and our outlook for inflation we are at a point where fiscal spending is exceptional, forget what the budget says. Between December 31 and April 30, government increased its borrowing in securities by about N700 billion and it reduced its savings with the CBN and banks to about N1.4 trillion, so technically the government has spent over N2 trillion in four months, that is a lot of money”, he said.
He stated clearly that if there is increased spending it would likely lead to higher interest rate “so people should not be looking forward to low interest rate at the time of increased government spending”.
Delivering a keynote address at the National Risk Management conference in Lagos, Sanusi tasked CEOs, risk managers, managers of the economy on the need to know that risk management is critical in everything they do.