The Central Bank of Nigeria (CBN) said it will continue to fund the Federal Government’s budgetary deficits by providing Ways and Means advances.
This was disclosed in a document titled, ‘Budgetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2024/2025’, obtained by NewsNGR.
The CBN maintained the 5 per cent threshold despite the National Assembly’s attempt to raise the threshold to 10 per cent.
The Ways and Means facility allows the central bank to provide short-term financing to the Nigerian government to address budget deficits.
The CBN said in the document that, “Ways and Means Advances shall continue to be available to the Federal Government to finance deficits in its budgetary operations to a maximum of 5.0 per cent of the previous year’s
actual collected revenue.
“Such advances shall be liquidated as soon as possible and shall in any event be repayable at the end of the year in which it was granted.
“Consistent with the banking arrangement of Treasury Single Account (TSA), Ways and Means Advances would now be determined after recognising the sub-accounts of the various
MDAs, which are now linked to the Consolidated Revenue Fund (CRF) to arrive at the FGN consolidated cash position. This would continue in the 2024/2025 fiscal years.”
CBN’s Ways and Means Advances to the federal government hit a record N22.7tn by May 2023 under former president Muhammadu Buhari.
Shortly before his tenure elapsed, Buhari got the approval of the Senate to securitise the N22.7tn Ways and Means against the CBN Act.