CBN Will Not Exceed 5% Ways and Means Limit, Says Budget Minister
Minister of Budget and Economic Planning, Atiku Bagudu, has assured that the Central Bank of Nigeria (CBN) will strictly adhere to its legal limit of 5% on ways and means financing to the federal government.
Speaking on Arise Television in collaboration with KPMG, Bagudu emphasized that the federal government is committed to responsible fiscal management and will not rely on the CBN to finance its N14 trillion budget deficit.
Ways and means financing allows the CBN to cover shortfalls in the government’s budget, but excessive reliance on it has been linked to inflation and economic instability. Bagudu highlighted that maintaining the 5% cap will boost investor confidence in Nigeria’s ability to manage its debt responsibly.
“Under no circumstance will the Central Bank exceed the legal limit of 5%,” Bagudu stated. “This should reassure the economy that we are not going to have unchecked recourse to the CBN. Instead, we are exploring innovative financing approaches, including local bond issuances and other market-driven strategies.”
He added that such measures reflect the government’s commitment to meeting debt service obligations without further burdening the economy.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, echoed Bagudu’s sentiments, stating that the federal government prioritizes macroeconomic stability. Edun noted that Nigeria is leveraging exchange rate stability, trade surpluses, and increased oil production to enhance its global economic standing.
“Our foreign reserves have now surpassed $40 billion, reflecting confidence in our economic policies,” Edun said. “The government is targeting a 7% annual growth rate as part of its broader economic strategy.”
In September 2024, Edun announced that the federal government had exited its reliance on ways and means financing for debt servicing—a move that analysts believe will help curb inflation.
President Bola Tinubu, in his 2024 Independence Day address, also highlighted the administration’s success in clearing over N30 trillion in ways and means advances.
