CBN Issues Conditions to FG For Printing More Money For Nigerians as National Debt Hits N87 Trillion

CBN Issues Conditions to FG For Printing More Money For Nigerians as National Debt Hits N87 Trillion

  • The governor of the CBN, Olayemi Cardoso, has said the bank will stop Ways and Loans Advances to the Nigerian government
  • Cardoso told a Senate Committee that the CBN would not be part of any Ways Means advances until Nigeria pays its outstanding debt
  • The Nigerian government is reportedly indebted to the CBN to the tune of N18.16 trillion

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said the bank will no longer grant Ways and Means advances to the Nigerian government until it pays its outstanding debt.

The CBN governor disclosed this on Friday, February 9, 2024, during a meeting with the Senate Committee on Banking, Insurance and Other Financial Institutions.

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Ways and Means Advances, CBN, National Assembly
Governor of the Central Bank of Nigeria, Olayemi Cardoso Credit: CBN
Source: UGC

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Cardoso was accompanied by Sani Abdullahi, CBN Deputy Governor of Economic Policy; Minister of Finance, Wale Edun; Atiku Bagudu, minister of Budget and National Planning; the minister of agriculture, Abubakar Kyari, and Aliyu Abdullahi.

Ways and Mean Advances is a loan facility by which the apex bank finances Nigeria’s budget shortfalls.

BusinessDay reports that in December 2023, the National Assembly approved the conversion of N7.2 trillion CBN’s Ways and Means to loans in the Consolidated Revenue Fund (CRF) of the Federal Government.

In March last year, the Debt Management Office (DMO) disclosed that the Nigerian government had borrowed about N18.16 trillion from the CBN.

FG owes CBN N18.16 trillion

The CBN boss insisted that the bank would not be part of the Ways and Means deal with the Nigerian government again if it fails to refund all outstanding debts, stating that the action complies with Section (38) of the CBN Act (2007).

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Cardoso said:

“I am pleased to note the Fiscal Authorities efforts in discontinuing ways and means advances. This also complies 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% of the previous year’s revenue.”

Cardoso revealed that the payment of the outstanding balance of the Ways and Means will control inflation in Nigeria.

CBN halts intervention loans

He also told the lawmakers that the bank had stopped quasi-fiscal measures of about N10 trillion under the guise of development finance interventions, which contributed to excess cash in the system and inflation.

He said:

“The CBN’s adoption of the 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.

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“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”, Cardoso said.

New data shows how much each Nigerian owes under Tinubu reported that data from the Debt Management Office (DMO) shows that Nigeria’s total public debt stands at N87.91 trillion as of September 2023.

The figure includes new borrowings under President Bola Tinubu.

The increased debt profile comes four months after President Tinubu and 18 new governors came into office in May 2023.


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