President Tinubu Will Adhere To Statutory Limits Of Ways And Means – Wale Edun

The statement from Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, provides some important insights into Nigeria’s approach to budget support and financing, particularly with regards to the Central Bank of Nigeria (CBN) and the World Bank:

Adherence to Statutory Limits: Mr. Edun emphasized that President Tinubu intends to adhere to statutory limits when seeking budget support facilities from the Central Bank of Nigeria through the Ways and Means Advances. This is in response to concerns raised by stakeholders and financial experts about the previous administration exceeding these limits.

Engagement with the World Bank: Nigeria is in discussions with the World Bank for a $1.5 billion budget support. This funding is considered highly cost-effective, and the World Bank is seen as a vital source of development financing for projects and programs in developing countries.

Climate Financing: The minister highlighted the global need for approximately one trillion dollars to address climate change. There is a climate financing fund that offers relatively inexpensive options, and Nigeria is committed to supporting Africa and other developing regions in their climate transition efforts. This includes exploring avenues such as green bonds and other climate financing mechanisms.

Concerns About Debt: The statement references concerns about Nigeria’s debt burden and mentions that under the previous administration, President Muhammadu Buhari secured substantial funds from the CBN through Ways and Means Advances. These actions were criticized, as they exceeded the statutory limits set by Section 38 of the CBN Act.

Legal Provisions: The statement highlights Section 38 of the CBN Act, which stipulates that funds the federal government can borrow must not exceed 5% of the previous year’s actual revenue of the government. The reference to the 2022 numbers indicates that the funds received through Ways and Means Advances exceeded the previous year’s revenue, which is a cause for concern.

In summary, this statement underscores Nigeria’s commitment to responsible and legal means of budget financing, its engagement with international financial institutions like the World Bank for support, and its focus on climate financing in the context of addressing climate change. It also acknowledges past issues with debt management and highlights the importance of adhering to statutory limits to avoid exacerbating the country’s debt burden.