Osinbajo: It’s absurd to say CBN is printing money to support FG

Vice-President Yemi Osinbajo has described as “absurd” allegations that the Central Bank of Nigeria (CBN) is printing money to support the federal government.

He was responding to a question from civil society organisations at the Nigeria Civil Society Situation Room Dialogue held in Abuja on Tuesday.

CBN “claims” on the federal government have reportedly gone from N678 billion in December 2013 to N6.5 trillion in April 2017.

These “claims” are made up of overdrafts, treasury bills, converted bonds and other lending.

Doyin Salami, PhD, a member of the monetary policy committee (MPC) of the CBN, was quoted in the leaked minutes of meeting as saying the apex bank was providing a “piggy bank” service to the federal government.

“That is certainly false,” Osinbajo said while responding to questions from about 70 CSOs at the event.

“I think it is very sad that that is being circulated. I think the whole idea that that the CBN is printing money to support government is completely absurd. And the context on which it was accredited to the person I think it was completely misunderstood.

“If you look at our M1, M2, the amount of money being circulated is within appropriate limits. And inflation has continued to go down month by month. Honestly, if there is money out there way beyond limit then we should expect that inflation will begin to go up. But that is not the case. Of course, there has been a firm-up on government borrowing and that is significant and we have been very upfront about what we are doing.

“The DMO (Debt Management Office) is required to publish the debt profile of government regularly and only three weeks ago the last debt profile was published.  The government has largely funded its activities through the treasury bills.

“There is no law that says the CBN should not intervene in agriculture. I personally believe that interventions are important especially in areas that government has funds. But how much has CBN expended? So far on the anchors borrowers programme (ABP), it has expended N52 billion and that is not a significant amount of money. The budget is about N7 trillion.

“So the issue of printing money, I personally I think is absurd because if that was the case, let’s say there is plenty of naira, it will put pressure on foreign exchange.”