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Nigeria’s Addiction to Central Bank Money Seen Hard to Cure

  • Finance minister vows to limit central bank financing
  • Low revenue driving dependence on central bank funding
General Economy As Nigeria Faces Rising Debt In 2020
Photographer: KC Nwakalor/Bloomberg
Updated on

The Nigerian government has become dependent on central-bank borrowing and will struggle to wean itself off the copious money printing that has raised concerns about the health of Africa’s largest economy, according to market observers.

After revenue collapsed during the oil shock of 2015, Africa’s biggest crude producer turned to the central bank, borrowing about a third of its debt from the apex lender to cover a budget deficit that’s tripled during the same time. Those loans -- cheap and easily available -- were not clearly reflected in the fiscal accounts and raised alarm bells at the International Monetary Fund and World Bank.