Godwin Emefiele, the Governor of Central Bank of Nigeria (CBN) has confirmed that the Federal Government printed N60 billion to augment March 2021 allocation to states.
He argued, just as he did in January when Fitch made the same accusation, that printing money to support states is not new and that ‘people should stop adding colouration to it’.
As if telling the states that they asked for the difficult route, Emefiele said they must be ready to pay back the loans.
Although the Minister of Finance, Zainab Ahmed, on Wednesday during Federal Executive Council (FEC) Meeting described Obaseki’s claims as “sad” and “untrue”, Emefiele explained in a video and report by TNG, that the bank’s interventions are meant to address the grim economic outlook because “Nigeria is unfortunately in a very bad situation,”
He added: “If you understand the concept of printing of money, it is about lending money”.
“That is our job. To print is about lending money. So, there is no need of putting all the controversy about printing of money as if we go into the factory, print the naira and start distributing on the streets.
“It’s very inappropriate for people to give colouration to printing of money as if it’s some foreign words coming from the sky”.
Emefiele added: “it’s important for me to put it this way that in 2015/16, the kind of situation we found ourselves in, we did provide a budget support facility to all the states of this country”.
“That loan is still unpaid up till now. We are going to insist on them paying back those monies since they’re accusing us of giving them loans”.
Emefiele was referring to how, in July 2015, President Muhammadu Buhari approved $2.1billion as an intervention package to help bankrupt states pay salaries and contractors.
Emefiele argued further: “Most countries in the world today are confronted not only by the challenges coming from the COVID-19 pandemic causing economic crisis and the rest of them.
“What I keep saying is that it will be irresponsible for the CBN or any other federal reserve to stand idle and refuse to support its government at this time and what we are doing here is being done in other climes.
“At the last MPC meeting, I gave data on what is being done in other climes to shore up their economy and take them out of recession.
“I’m not going to pretend about it. We are facing a problem about productivity output which is GDP. Luckily, we managed to exit from recession, now we are looking at how to get our head above the water.”
In January this year, Emefiele replied Fitch rating which accused Federal Government of printing money to finance the federal government budget.
Emefiele said at a press conference: “If government cannot finance all its obligations,” the central bank should offer support as a lender of last resort.
According to Fitch, the repeated financing of the Federal Government’s budget deficit by the Central Bank through Ways and Means is, according to The Guardian, a risk to Nigeria’s macroeconomic stability.
However, Emefiele argued: “It is unfair and very unfortunate that Fitch, which is known to be a first-class company, would hold such views on what we are doing
