In reacting to concerns shown by a member of the monetary policy committee of Nigeria’s central bank that the apex bank was acting like a ‘piggy bank’ with its funding of government, Godwin Emefiele, the CBN governor said that the apex bank was neither over-funding the Federal government or was it operationally strained in anyway.
Emefiele disclosed this while announcing the decisions taken by its monetary policy committee (MPC) Tuesday in Abuja.
He said the CBN has and will always play its role as the bankers’ bank, adviser to the federal government and the lender of last resort.
“The CBN is not funding the federal government beyond the threshold. The government on its own decided its funds in banks be moved into the treasury single account (TSA) in the CBN. It is the government’s money.
“For instance, if you own a fixed deposit account and for some reasons, you want spontaneous financing; your bank can allow you overdraw your account. So, there is no truth about over-funding the government,” he said.
He explained that what is over-drawn is much less than what the government has in its TSA account.
“This issue of over-funding the government sprang from what an online medium culled from what a member of the MPC said. It was a personal statement and this goes to show that members of the MPC are independent-minded people,” he noted.
According to Emefiele, Nigeria’s Central Bank remains one of the most transparent in the world.
“If you look at other nations MPC, you will discover that their decisions are not as detailed as ours. They are not so transparent,” Emefiele stressed.
The CBN Governor further said its intervention in the economy was in tandem with global standards as it had to save Nigeria from being too vulnerable to economic shocks and other issues.
“Even at that, we did not over-fund the government.
“The size of our balance sheet relative to GDP is 23 percent. China is 49 percent. Euro is 27, Swiss is 95. Taiwan is 98. In the US, it is 28 percent. Ours is low and calls for no concern or worry. We need to get that clear” he added.
By Ejiro Awhana