He recently had his say while speaking to the press, and Nigerians have ben reacting.
According to him, it was one of the measures taken by the apex bank to curtail the economic country currently plaguing the country, and there will be no going back on the decision.
He added that the bank must strictly adhere to the law limiting advances under ways and means to five percent of the previous year’s revenue.
His words, “On our side at the CBN, we have responded with significant monetary policy tightening to reign in inflationary pressure.
Empirical analysis has established that money supply is one of the factors fueling the current inflationary pressure. For instance, an analysis of the trend of the money supply spanning over nine months shows that M3 increased from N52.01tn in January 2023 to N68.25tn in November 2023 representing N16.24tn or 31.22 percent increase over the period.
Increase in Net Foreign Asset following the harmonisation of exchange rates and the N3.22tn ways and means advances were the major factors driving the increase in the money supply.
I am pleased to note the Fiscal Authorities efforts in discontinuing Ways and Means advances. This is also in compliance with Section (38) of the CBN Act (2007), the Bank is no longer at liberty to grant further Ways and Means advances to the Federal Government until the outstanding balance as of December 31, 2023, is fully settled.
The bank must strictly adhere to the law limiting advances under ways and means to five percent of the previous year’s revenue.
We have also halted quasi-fiscal measures of over N10tn by the Central Bank of Nigeria under the guise of development finance interventions which hitherto contributed to flooding excess Naira and raising prices to the levels of Inflation we are grappling with today.”
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