CBN Owns Up to Printing Money to Support Spending

CBN Owns Up to Printing Money to Support Spending

By Bashir Olanrewaju

Central Bank of Nigeria Governor Godwin Emefiele owned up to printing money to fund government spending amid economic woes, saying it would be irresponsible not to do so.

Godwin Obaseki, the governor of southern Edo state, caused a stir early this week when he said the monetary policy regulator had printed 60 billion naira to augment funds made available to the 36 states and the federal government in March.

Finance Minister Zainab Ahmed disputed Obaseki’s claim, insisting that funds shared among the tiers of government were officially collected revenue from oil and tax revenue. “It is not true to say we printed money to distribute,” she told reporters after Wednesday ‘s weekly cabinet meeting in Abuja.

But when confronted with the question by reporters,  Emefiele defended the practice.

“The concept of printing of money is about lending money and that is our job,” Emefiele said. “It will be irresponsible for the CBN or any Central Bank or Fed to stand idle and refuse to support its government at a time like this.”

Nigeria went into its second recession in four years in 2020 as the price of crude oil, its main export, plummeted on the back of the coronavirus pandemic, while a lockdown to curb its spread stifled productivity.

The Buhari administration has increasingly relied on borrowing to meet the financing gap, with total debt estimated at about 85 billion dollars at the end of last year. Some analysts are of the view that relying on CBN ways and means financing could further stoke inflation, which at 17.3 percent is the highest in more than a decade.