Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has confirmed that the apex bank will no longer give Ways and Means to the Federal Government until the previous loans are repaid.
Ways and means is the money that the CBN lends to the Federal Government in the meantime to augment spending based on the time the revenue is generated.
The CBN governor made this statement on Friday when during an interface with the Senate Committee on Banking, Insurance and Other Financial Institutions alongside Sani Abdullahi, CBN Deputy Governor of Economic Policy; Wale Edun, minister of Finance and coordinating minister for the Economy, Atiku Bagudu, minister of Budget and National Planning, Abubakar Kyari, minister of Agriculture, and Aliyu Abdullahi, minister of state for agriculture.
Cardoso insisted that the apex bank will not be a part of Ways and Means agreement with the federal government again if it failed to refund all the outstanding debts, noting that the action is in compliance with section (38) of the CBN Act (2007).
“I am pleased to note the Fiscal Authorities efforts in discontinuing ways and means advances. This is also in compliance with section (38) of the CBN Act (2007), the Bank is no longer at liberty to grant further ways and means advances to the Federal Government until the outstanding balance as of December 31, 2023, is fully settled. The Bank must strictly adhere to the law limiting advances under ways and means to 5 percent of the previous year’s revenue.
We have also halted quasi-fiscal measures of over 10 trillion naira by the Central Bank of Nigeria under the guise of development finance interventions which hitherto contributed to flooding excess Naira and raising prices to the levels of Inflation we are grappling with today.
“The CBN’s adoption of an inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability, potentially leading to lowered policy rates, stimulating investment, and creating job opportunities.
“Our MPC meeting on the 26th and 27th of February is also expected to review the situation and take further decisions on these important issues.
“Distinguished Senators, Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 percent in the medium term, aided by improved agricultural productivity and easing global supply chain pressures”
