The Governor of the Central Bank of Nigeria, Olayemi Cardoso, announced that the apex bank will cease providing Ways and Means to the Federal Government until prior loans are settled, as part of measures to address the ongoing economic challenges.
This decision, disclosed during a meeting with the Senate Committees on Finance, Appropriations, Banking, Insurance, and Other Financial Institutions, aims to curb inflationary pressures.
Cardoso emphasized the importance of adhering to the law, citing Section 38 of the CBN Act (2007), restricting further Ways and Means advances until the outstanding balance as of December 31, 2023, is fully repaid.
He highlighted the cessation of quasi-fiscal measures and commended fiscal authorities for discontinuing Ways and Means advances.
The CBN governor underscored the adoption of an inflation-targeting framework, expressing optimism that these measures, coupled with collaboration with fiscal authorities, would lead to price stability, potentially lowering policy rates, stimulating investment, and creating job opportunities.
Cardoso acknowledged early signs of success, with significant foreign exchange inflows, such as the recent oversubscription of the Nigeria Treasury Bill auction.
He urged moderation in the demand for foreign exchange to sustain these positive outcomes.
Addressing the Naira’s depreciation, Cardoso advised Nigerians to reduce their quest for dollars and foreign goods consumption.
He stressed the need for a collective effort to stabilize the exchange rate, outlining comprehensive strategies to enhance liquidity in the foreign exchange markets.
Cardoso assured Senators that inflationary pressures are expected to decline in 2024, targeting a rate of 21.4 percent, aided by improved agricultural productivity and global supply chain easing.
The economic team, including the Ministers of Finance, Budget and National Planning, and Agriculture, provided additional insights in response to Senators’ questions on the state of the economy.
Senators raised concerns about the $3.3 billion loan for Naira rescue and called for a forensic investigation into past transactions and the bank’s compliance.
Senator Adetokunbo Abiru emphasized the need for special measures to address inflation and support critical sectors like agriculture and manufacturing.
He also urged the CBN governor to provide the committee with an audited account of the apex bank and its budget.
Senator Orji Uzor Kalu called for the ban of dollar use in Nigeria and urged swift action to strengthen the Naira.
He emphasized the importance of holding those who defaulted on documents accountable, addressing the concerns of the Nigerian Labour Congress and Trade Union Congress.
In response, the CBN governor outlined ongoing efforts, including liquidity-enhancing strategies, inflation-targeting policies, and measures to promote the Naira’s stability.
He acknowledged the challenges but assured Senators of the CBN’s commitment to addressing them in collaboration with relevant stakeholders.
