Fed Govt’s account balance in credit

The Federal Government's account with the Central Bank of Nigeria (CBN) is in credit, contrary to Emir of Kano Muhammadu Sanusi 11's claim to the contrary, it was learnt yesterday.The emir, a former CBN governor, alleged at the weekend that the account of the Federal Government with the apex bank had been overdrawn by N4.7trillion by the Muhammadu Buhari administration.The emir, in a paper titled: "A plan to restore confidence, direction and growth" during a policy dialogue organised by an economic think tank, the Savannah Centre for Diplomacy, Democracy and Development, said the "CBN claims on the FGN now tops N4.7 trillion", asserting that the amount is "equal to almost 50 per cent of the FGN's total domestic debt".

He added:  "This was a clear violation of the Central Bank Act of 2007 which caps advances to the FGN at five per cent of the previous year's revenues."The position of the CBN, a Presidency source told The Nation, is that the Emir's assertions are false.The source, who pleaded for anonymity because he is not allowed to talk on the matter, wondered why the former CBN governor, despite his knowledge of these matters, opted to misrepresent the facts."Despite the Emir's seeming knowledge of these situations, his assertions are totally false and wholly fabricated."The source, a senior government official, said: "Contrary to his claims, the Federal Government's Treasury Single Account (TSA) balance with the CBN as of 2nd December 2016 was N2.66 trillion (credit).

In line with practices that even Emir Sanusi presided over, the Federal Government has overdrawn another account at the CBN by about N1.47 trillion (debit) as of 2nd December 2016. In effect therefore, the net balance of the Federal Government account at the CBN is over N1.19 trillion (credit)."A breakdown of the Federal Government balance as at 2nd December, 2016, which The Nation obtained, is shown below.Inflows into TSA (4,473.20) Forex Transfer into TSA (101.70) Grand Total Balance (4,574.90) Expenses(1,913.24) Credit balance in TSA (2,661.66) Less Ways & Means Adv. (-1,467.67) Net TSA Balance – (1,193.79)

The source said even though the Federal Government balance in one account may be in deficit, "the truth of the matter is that the cumulative account balance of the Federal Government remains healthy and in credit".
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