Federal Government Loan Requests Denied By Central Bank Of Nigeria

Federal Government Loan Requests Denied By Central Bank Of Nigeria....KINDLY READ THE FULL STORY HERE▶

During an interactive session with the Senate Committee on Banking, Insurance, and other Financial Institutions, along with the Minister of Finance and Coordinating Minister for the Economy, Olawale Edun, Minister of Budget and National Planning, Atiku Bagudu, and Minister of Agriculture, Abubakar Kyari, CBN Governor Olayemi Cardoso announced the cessation of loan provision to the Federal Government. This decision was prompted by the federal government’s failure to settle its outstanding debt………CONTINUE READING

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As of June 2023, the federal government’s borrowing from the CBN amounted to N4.36 trillion, a month after former President Muhammadu Buhari secured N22.7 trillion from the apex bank. This outstanding debt surpasses five percent of the federal government’s revenue for 2023, which is N8.8 trillion, contravening the CBN Act.

Cardoso highlighted the Fiscal Authorities’ efforts to discontinue ways and means advances, stating that, in compliance with Section 38 of the CBN Act (2007), the bank cannot grant further advances until the outstanding balance as of December 31, 2023, is fully settled. He emphasized adherence to the law, limiting advances under ways and means to 5 percent of the previous year’s revenue.

Furthermore, Cardoso revealed the cessation of quasi-fiscal measures amounting to over 10 trillion naira by the CBN, previously implemented under the guise of development finance interventions. These measures had contributed to an excess of Naira in circulation and elevated inflation levels.

The CBN’s adoption of an inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability. This strategy aims to lower policy rates, stimulate investment, and create job opportunities. The forthcoming MPC meeting on February 26th and 27th is expected to review the situation and make further decisions.

Cardoso expressed optimism that inflationary pressures would decrease in 2024 due to the CBN’s inflation-targeting policy. The objective is to rein in inflation to 21.4 percent in the medium term, supported by improved agricultural productivity and alleviation of global supply chain pressures.

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Source: Bushradiogist