No More CBN Loan: FG Speaks on Ending Central Bank's Borrowing For Debt Servicing

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  • CBN’s ways and Means facility will no longer be used by the federal government to settle its debts
  • The minister said that the objective of the economic stabilisation plan is to maximise the benefits of ongoing reforms
  • Edun declared that the government's economic plan will include fiscal measures to support manufacturers

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The federal government has formally stopped using the Central Bank of Nigeria's (CBN) Ways and Means facility to pay off its obligations.

Wale Edun announced that fiscal measures are being developed to encourage manufacturers, Photo Credit: FGSource: UGC

The minister of finance and coordinating minister of the economy, Wale Edun, stated this at the 2024 Access Corporate Forum, themed ‘Nigeria’s Economic Rebirth: Hopes and Implications.

Edun's remarks follow the CBN's announcement that it would continue to limit its Ways and Means advances to the federal government to 5% for the fiscal year 2024–2025. Budget gaps have previously been filled with this facility.

CBN Slashes Government Borrowing Cap to 5% after Rep Increased RateThe Central Bank of Nigeria said that, subject to a 5% ceiling, it will keep giving the Federal Government Ways and Means Advances for the fiscal years 2024–2025.by  Zainab Iwayemi, 18 Sep 2024

He also emphasised how President Tinubu's support for the creation of a strong treasury and liabilities management system will improve Nigeria's financial management.

The minister disclosed in an AriseTV report that enhancing the advantages of ongoing reforms is the goal of the government's economic stabilization plan.

He also declared plans to organise 360,000 farmers to plant the same number of hectares, with the goal of harvesting 1.4 million metric tonnes of cassava, wheat, and maise.

Edun announced that fiscal measures are being developed to encourage manufacturers and that the government's economic strategy will be finalised by calling a reconvening of the economic management team.

With the aim of cutting the number of levies to just ten, plans are in motion to streamline the tax system for enterprises. He explained that ninety percent of tax revenue comes from less than 10 taxes.

No More Dollar: Dangote Refinery to Accept Another Means of Payment for Petrol SalesThe deal between the FG and Dangote Refineries regarding the sale of PMS to NNPCL has been praised by the Nigeria Employers' Consultative Association.by  Zainab Iwayemi, 17 Sep 2024

The government is also looking to promote investment and economic expansion by lowering the rates on corporate income taxes. Furthermore, VAT will not apply to necessities like food, medicine, or health supplies, but taxes on luxuries would increase.

FG settles important debt with a domestic creditor

Legit.ng reported that the Nigerian government has allocated about N4.83 trillion from the earnings of Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 to settle the Ways and Means advances from the Central Bank of Nigeria (CBN).

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said this during his presentation at the Lagos Business School Breakfast Club.

In 2023, the Nigerian government obtained about N2.94 trillion from the apex bank via the Ways and Means advances to service domestic debts.