…Introduces measures to check inflation
Governor of the Central Bank of Nigeria, Olayemi Cardoso, has said the bank will no longer grant Ways and Means to the federal government unless the outstanding balance is settled.
Cardoso also announced measures the bank was taking to tame the rising inflation in the country which has led to an astronomical increase in the prices of goods and services.
He disclosed these on Friday when he appeared before the Senate Committee on Banking, Insurance, and Other Financial Institutions alongside the Minister of Finance and Coordinating Minister for the Economy, Olawale Edun, the Minister of Budget and National Planning, Atiku Bagudu, and the Minister of Agriculture, Abubakar Kyari.
Ways and Means is a loan facility through which the Central Bank of Nigeria finances the federal government’s budget shortfalls.
But addressing the lawmakers, Cardoso insisted that the central bank would not be a part of the Ways and Means agreement with the federal government again the latter failed to refund all the outstanding debts on the Ways and Means already advanced.
The CBN governor said the position complies with section (38) of the CBN Act (2007), adding that the payment of the outstanding balance of the Ways and Means will control inflation in the country.
“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”.
