In a significant move aimed at tackling Nigeria’s economic challenges, Central Bank Governor Olayemi Cardoso declared that the apex bank would withhold Ways and Means loans to the President until previous debts are repaid. The decision comes amidst efforts to address the country’s economic decline, exacerbated by past fiscal mismanagement.
Ways and Means, a practice where the Central Bank lends money to the Federal Government to supplement spending, is now subject to strict scrutiny. Former CBN Governor Godwin Emefiele’s alleged unauthorized printing of N22.7tn for ex-President Muhammadu Buhari underscores the need for accountability.
During discussions with the Senate Committees on Finance, Appropriations, and Banking, Cardoso emphasized the urgency of curbing inflationary pressures driven by an unchecked money supply. He underscored that the CBN’s response includes halting quasi-fiscal measures and discontinuing Ways and Means advances, as mandated by the CBN Act.
Acknowledging fiscal authorities’ efforts to discontinue such advances, Cardoso stressed adherence to legal limits on advances and emphasized the need for sustainable measures to stabilize the economy. Recent measures to enhance USD supply and curb speculative forex demand have yielded positive outcomes, with over $1 billion inflow observed.
Addressing concerns about the free fall of the naira against foreign currencies, Cardoso urged moderation in USD demand and consumption of foreign goods. He outlined a comprehensive strategy to enhance FX liquidity and stabilize exchange rates, emphasizing collective efforts to reduce demand for USD.
Despite challenges, Cardoso expressed optimism about reducing inflation rates to 21.4% in 2024, relying on inflation-targeting policies, and improving agricultural productivity. As stakeholders, including ministers and lawmakers, engage in discussions, questions about the efficacy of past loans and strategies underscore the complexities of Nigeria’s economic landscape.