By Peter Omopo
The Central Bank of Nigeria (CBN) recorded a sharp decline in interest income from the Federal Government’s overdraft facility in 2024, earning just N3.1 billion compared to N1.6 trillion in 2023, according to the apex bank’s latest audited financial statements.
The earnings, listed under “loans and receivables,” stem from the controversial Ways and Means facility—a short-term overdraft mechanism used by the Federal Government to cover fiscal deficits. The interest was charged at the Monetary Policy Rate plus three percentage points.
The 99.8 percent year-on-year decline highlights a major policy shift as the CBN moves to curb the government’s reliance on the facility. Analysts say the development signals improved coordination between fiscal and monetary authorities and reflects efforts to stabilize the economy.
The plunge in earnings followed the securitisation of N22.7 trillion in outstanding overdrafts in 2023, a move approved by the National Assembly. The debt was converted into 40-year bonds with a three-year moratorium, aimed at easing inflationary pressures and strengthening the apex bank’s balance sheet.
In June 2024, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that the government had repaid N7.3 trillion of the securitised Ways and Means debt.
