The Central Bank of Nigeria has confirmed that it will sustain its Ways and Means Advances to the Federal Government at a five per cent limit for the fiscal years 2024-2025.
This information is based on the Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024-2025, published by the apex bank on Tuesday.
The latest development is contrary to a bill passed by the National Assembly which raised the maximum borrowing percentage in the Act from five per cent to 10 per cent.
According to the guidelines, the CBN can advance up to five per cent of the previous year’s actual collected revenue to the Federal Government, which must be repaid within the year to prevent a long-term fiscal burden.
The guideline aligns with the MTFF, under which the CBN will manage expectations, implement time-consistent policies, address shocks to support the ongoing recovery and ensure the country’s macroeconomic stability.
The document stated, “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.”
