CBN lends illegally to FG, no one will lend $30bn to Nigeria —Sanusi

The Emir of Kano, Alhaji Muhammad Sanusi II, on Friday, accused the Central Bank of Nigeria (CBN) of illegal lending to the federal government.

According to an online news medium, The Cable, Emir Sanusi, a former CBN governor, said this at a policy monitoring dialogue hosted by Savannah Centre for Diplomacy, Democracy and Development, at Transcorp Hilton Hotel in Abuja.

Sanusi, who said that the CBN had been lending to the government above the limits stipulated by the CBN Act of 2007, added that CBN’s lending to the government since President Muhammadu Buhari assumed office had risen from about N1.5 trillion to over N4.5 trillion.

He stated, “The CBN-FGN relationship is no longer independent. In fact, one could argue their relationship has become unhealthy.

“CBN claims on the FGN now top N4.7 trillion — equal to almost 50 per cent of the FGN’s total domestic debt. This is a clear violation of the Central Bank Act of 2007 (Section 38.2) which caps advances to the FGN at 5 per cent of last year’s revenues. Has CBN become the government’s lender of last or first resort?”

The former apex bank governor said the poor management of the economy had made lending to the country unattractive to foreign lenders, positing that it would be difficult for the government to get any lender for its proposed $30bilion loan.

According to him, “if Senate approves, I want to see who will lend $30billion to Nigeria when we have five exchange rates”.

The Emir, who lamented that the country is enmeshed in heavy debts, said the situation has made it difficult for the country to fund crucial sectors as “out of every N1 Nigeria makes, 40 kobo goes to debt and 60 kobo is left for salaries, health, education, power, infrastructure.”

He added that in every economy, growth is driven by “consumption, investment and net export”, noting that “our exports cannot grow, without regulatory certainty or an increase in the price of oil”.