JUST IN: CBN Disregards N’Assembly 5% ways, means advance limit

By Stephen Asaba-ase

The Central Bank of Nigeria has maintained that it will retain its Ways and Means of Advancing the 5 percent limit of the Federal government fiscal years, 2024-2025.

However, the current bill passed by the National Assembly is contrary to the maximum borrowing percentage in the Act, which had raised from five percent to ten percent and which had developed a serious Issues.

This information is based on the financial, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024-2025, published by the apex bank on Tuesday.

The guideline is in consonance with the MTFF, under which the CBN will manage expectations, implement timely policies, address glimpses to support the ongoing recovery, and ensure the country’s macroeconomic stability.

Meanwhile, the document expressed, “Ways and Means Advances limit of 5%, and which shall continue to be made available to the Federal Government to finance deficits with its budgetary operations and maximum of 5.0 per cent for previous year’s actual collected revenue. Such advances shall be liquidated as soon as possible and shall in any event be repayable at the end of the year in which it was granted.”

CBN also noted that, the advances would now be concerned after acknowledging the sub-accounts of of the MDAs, adding that, it will continue with the banking arrangement of Treasury Single Account, Ways, Means and Advances would now linked to the Consolidated Revenue Fund to arrive at the FGN consolidated cash position. This would continue in the 2024/2025 fiscal years,” It noted.

The Ways and Means Advances are loan facilities used by the CBN to finance the government during periods of temporary budget shortfalls and are subject to limits imposed by law.

According to Section 38 of the CBN Act, 2007, the apex bank may grant temporary advances to the Federal Government with regards to temporary deficiency of budget revenue at such a rate of interest as the bank may determine.

In 2023, there was serious controversy concerning the amount approved by the Central Bank to the government. The former CBN governor, Godwin Emefiele, without approval from the National Assembly, allegedly printed the sum of N22.7tn for former President Muhammadu Buhari under Ways and Means.

Experts believe the large amount contributes to the high inflation rate and increased money circulation in the economy.

At a Senate Committee meeting in February 2024, the CBN Governor, Olayemi Cardoso, said that the apex bank will no longer give Ways and Means to the Federal Government until the previous loans are repaid.

Olayemi noted that it was one of the measures taken by the apex bank to curtail the economic country currently plaguing the country.

More details soon…