Buhari’s Aide Disputes CBN Governor’s Claims on N35 Trillion Money Printing

A former aide of ex-President Muhammadu Buhari has disputed claims made by the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, that the economic challenges facing the country are due to poor management during Buhari’s tenure from 2015 to 2023. Cardoso had stated that the CBN printed N35 trillion during this period, a figure the aide says is inaccurate.

Speaking on the condition of anonymity, the aide argued that the total amount supplied by the CBN through the controversial ‘Ways and Means’ financing was only N7.5 trillion, significantly lower than the N35 trillion mentioned by Cardoso.

“I have read the story, and my thinking is that Nigerians will just be laughing at them. The real position of things is that from the beginning, when the then-acting Governor of the Central Bank of Nigeria was in office, the issue arose from that moment. The CBN was called by the National Assembly, what were their numbers? And the numbers for Buhari were not more than N7.5 trillion for all eight years,” the aide explained.

The debate over the exact figures comes in light of recent data from the CBN, which shows that the total money supply in Nigeria increased by 14.22% from N93.77 trillion in January 2024 to N107.1 trillion in August 2024. This significant increase in money supply has been a source of concern, contributing to rising inflation and a weakened naira.

At a recent media briefing in Abuja, Cardoso highlighted the dramatic rise in money supply from N19 trillion in 2015 to N54 trillion in 2023, attributing this spike to the massive issuance of money through the ‘Ways and Means’ method. This process involves the CBN lending money directly to the government without corresponding economic output, leading to excess liquidity in the economy.

Cardoso argued that this influx of naira in the economy resulted in “too much money chasing the same amount of goods,” which has contributed to the high inflation rates and economic hardship currently being experienced in Nigeria.

The former President’s aide, however, refuted these claims, pointing to a letter allegedly sent by the CBN to the Senate, which indicated that the total Ways and Means advances from 2015 to 2023 amounted to N7.5 trillion. The letter, dated January 16, 2023, addressed to the Senate Majority Leader, stated that, “All letters received by the CBN for processing of the advances are provided in Appendix 1 & 2. However, kindly note that the figure of -22,719,7033,774,306.90 is the balance of the Treasury Sub-Treasury Account as of December 19, 2022. This account is the account mandated for granting overdraft facilities to the Federal Government account.”

During Buhari’s administration, Nigeria faced several economic challenges, including plummeting oil prices and reduced revenue, which led the government to rely heavily on the CBN for financing. This approach, however, has been criticized for creating an excess supply of money in the economy, which was not matched by a corresponding increase in productivity.

Both Cardoso and the current Finance Minister, Wale Edun, have acknowledged that the rapid monetary expansion during Buhari’s tenure led to a weakened naira and runaway inflation, making everyday goods and services less affordable for Nigerians.

Attempts to get comments from CBN and presidency officials on the claims made by the former President’s aide were unsuccessful, as they had not responded to inquiries by the time of this report on Saturday night.

Meanwhile, data from the CBN shows that the country’s money supply has been rising steadily. Between July and August 2024, there was a 0.75% increase from N106.3 trillion to N107.1 trillion. Compared to June 2024, when the figure was N101.4 trillion, this represents a 5.6% rise. On a year-on-year basis, the money supply in August 2024 marked a staggering 65% increase from N64.8 trillion in August 2023.

The CBN’s definition of money supply includes all cash in circulation, as well as bank deposits that can be easily converted to cash. This includes currency outside banks, demand deposits, and quasi-money, reflecting the growing liquidity in the Nigerian economy.

This surge in liquidity continues to pose a challenge for the CBN’s Monetary Policy Committee as it tries to balance economic growth with the need to control inflation. Currency outside banks stood at N3.8 trillion, while demand deposits reached N31 trillion, and quasi-money surged to N72.2 trillion in August 2024.

Cardoso has pointed to the high money supply as a key reason for the rising inflation in Nigeria. Increased liquidity can stimulate short-term economic growth by making credit more accessible, which can boost production and job creation. However, when the supply of goods and services does not keep pace with the growing demand, it can lead to inflation, eroding the purchasing power of the naira.

The ongoing debate over the actual figures of money printed during Buhari’s tenure and its impact on the economy underscores the challenges Nigeria faces in achieving sustainable economic growth while maintaining price stability.