On Friday December 2nd, former CBN governor Emir Sanusi Lamido Sanusi gave a presentation at the Savannah Center for Diplomacy,Democracy and Development in Abuja, in which he outlined a plan to restore Nigeria to economic growth.

That presentation is well worth reading in its entirety (download it here) but one data point he highlighted was disturbing.

Sanusi pointed out the unhealthy relationship between the CBN and the Federal Government and said  that this was reflected in its lending to the FG at levels far in excess of those prescribed by the CBN Act of 2007.

The Act specifies that lending to the FG (also known as ‘printing money’) should be capped at 5% of the previous year’s revenues.

The figure given by Sanusi said the current figure is N4.7 trillion, which would be a gross violation of that Act.

It prompted Garba Shehu to challenge the figures.

The overdraw does not exceed 1.5 trillion. It is incorrect to say, as he did that the account was overdrawn by 4.5 trillion.

— Garba Shehu (@GarShehu) December 3, 2016

Who is correct? Here are the CBN’s own figures.

The figures on line 21 minus the figures in line 22, give the figures in line 23.

If you add all the figures on line 23 together, they amount to over N5 trillion as at October.

The FG’s revenues for 2015 were N2.4 trillion, and 5% of that figure would be N120 billion, per the CBN Act of 2007.

A previous law from 1991 pegged the CBN’s lending facility to the FG at 12.5%, which would come to N300 billion. Even if that were the benchmark, the CBN would still be in violation.

To distract from the matter, Mr Shehu then talked about the TSA.

But even assuming that he was correct. This is a govt that has money in excess the amount he mentioned in the Treasury Single Account, TSA.

— Garba Shehu (@GarShehu) December 3, 2016

Newsflash: Money in the TSA is not revenues, and is not connected in any way with the law the CBN is in violation of.

It is important that the Senate investigate the apex bank’s lending to the FG, because of its impact on inflation and what is says about the independence of that crucial institution.

Nigeria cannot afford to have a CBN governor who is a lapdog of the executive.