Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, announced on Friday, February 9, that the apex bank would cease granting Ways and Means Advances to the federal government until the outstanding balance is settled.
Additionally, the CBN revealed it had put an end to “quasi-fiscal measures” amounting to over N10 trillion, previously disguised as development finance interventions.
Cardoso made these declarations during his appearance before the joint Senate Committee on Banking, Insurance and Other Financial Institutions, Finance, and National Planning, addressing crucial concerns regarding exchange rates and inflationary pressures in the economy.
Minister of Finance and Coordinating Minister for the Economy, Olawale Edun, alongside the Minister of Budget and National Planning, Atiku Bagudu, and the Minister of Agriculture, Abubakar Kyari, were also present at the interactive session with the lawmakers.
Ways and Means Advances serve as a loan facility utilized by the Central Bank of Nigeria to finance the federal government’s budget deficits. Last December, the National Assembly authorized the securitization of the outstanding debit balance of N7.3 trillion of the Ways and Means Advances in the Consolidated Revenue Fund (CRF) of the Federal Government.
Cardoso emphasized that adherence to the repayment of the outstanding balance of the Ways and Means Advances was crucial in combating inflation in the country. He stated, “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.”
Furthermore, Cardoso highlighted the cessation of quasi-fiscal measures amounting to over N10 trillion by the CBN, which previously contributed to excessive Naira liquidity and inflationary pressures. He underscored the importance of collaboration between the CBN and fiscal authorities to achieve price stability and economic growth.
“Our MPC (Monetary Policy Committee) meeting on the 26th and 27th of February is also expected to review the situation and take further decisions on these important issues,” Cardoso added.
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