The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has announced that the apex bank will cease providing Ways and Means to the Federal Government until previous loans are repaid. This decision is part of the measures taken to address the current economic challenges facing the country.
Ways and means refer to funds lent by the CBN to the Federal Government to support spending until revenue is generated. Cardoso made this statement during a meeting with the Senate Committees on Finance, Appropriations, Banking, Insurance, and Other Financial Institutions. The Senate had summoned the economic team, including the CBN governor and various ministers, to discuss the economic situation, particularly the depreciation of the Naira and the rise in food prices.
Cardoso emphasized that the CBN has tightened monetary policy to combat inflationary pressures, citing an increase in money supply and ways and means advances as contributing factors to inflation. He noted that the discontinuation of ways and means advances aligns with the CBN Act and aims to limit inflation.
Additionally, Cardoso highlighted efforts to attract foreign exchange inflows and stabilize the exchange rate. He urged Nigerians to reduce their demand for dollars and foreign goods to help stabilize the Naira. Cardoso assured the Senate that measures are in place to reduce inflation and stabilize the economy, with expectations of a decline in inflation to 21.4% in 2024. However, he stressed the need for collaboration between the CBN, government, and individuals to achieve economic stability.
Senators raised concerns about the effectiveness of previous interventions and called for accountability in managing the economy. They also urged the CBN to address the concerns of labor unions and take proactive steps to mitigate economic challenges.