FG nets N3.7tr against CBN in five year operations

Apex bank refutes reports on transactions with govt as mischief
The Federal Government emerged the highest claimant against the Central Bank of Nigeria (CBN), in a two-way financial activity in the last five years, netting N3.7 trillion.

According to a financial transactions obtained from the apex bank, government was the net creditor of CBN in 2014, 2015 and 2017 with values worth N2.14 trillion, N1.65 trillion and N360 million, respectively, totalling N4.15 trillion cumulatively.

On the other hand, CBN was the net creditor to the Federal Government in 2016 and 2018 financial years to the tune of N110 million and N340 million, respectively, totalling N450 million, with a net credit balance in favour of the government.

The CBN gave the details in response to inquiries over its transactions with the Federal Government, as well as its reaction to a media reports (not The Guardian), which it described as “mischief.”

In a statement from its Corporate Communications Department, the report titled: “CBN’s life support to FG rises 780% to N8.12 trillion in four years”, can be clearly deduced by any unbiased and informed analyst, as one-sided.

“We wish to state categorically that the story is not only false, but an attempt, through sheer mischief, to distort and misrepresent CBN’s financial operations and also to misinform the investing public on the financial health of our country.

“In order to arrive at their plot, the authors of the BusinessDay story had conveniently restricted their report only to CBN’s claims on the Federal Government, while ignoring other numerous deposits of the Federal Government, including those of the Treasury Single Account (TSA), with the CBN.

“From the foregoing and the detailed database, it is clearly inappropriate to compare the position as at end-2018 with the position as at end-2014, ignoring the movements within the period.

“We wish, therefore, to reassure the investing community and the general public that the CBN remains faithful to its statutory mandate as banker and financial adviser to the Federal Government,” CBN spokesman, Isaac Okorafor, said.

The bank, in recent times, has been subjected to series of what it described as unfounded reports, leading to unveiling of details about the country’s foreign capital inflows, which it estimated at $19.07 billion.

CBN maintained that despite the challenges facing the economy, it continued to enjoy the patronage of foreign investors, as out of the total capital inflow, Foreign Direct Investment (FDI) accounted for $7.78 billion, which is also an indication of confidence in the economy as a business destination.

According to Okorafor, while the bank is not privy to the methodology used in arriving at the figures, it opened up the available records, which showed a significant increase in FDI into Nigeria during the period 2018, contrary to the Reuters’ report.

Furthermore, total capital flows to Nigeria, from January to May 2019 stood at $14.2 billion, of which FDI accounted for $2.87 billion, representing a 20.18 per cent of the total amount.

“The country continues to enjoy steady capital flows due to the prevailing stable macroeconomic environment and sustained investors’ confidence in the economy.

“Against this background, we wish to urge the public to take advantage of several publications by the CBN and the National Bureau of Statistics (NBS), which give adequate and accurate statistics on the subject matter,” the statement said.