Central Bank of Nigeria reaffirms commitment to a 5% borrowing limit to ensure fiscal responsibility for 2024-2025. The Central Bank of Nigeria (CBN) has announced 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 move, confirmed in the CBN’s newly released “Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for 2024-2025,” directly contrasts with a recent bill passed by the National Assembly, which increased the maximum borrowing cap from five to 10 per cent.
According to the guidelines, the CBN can only advance up to five per cent of the previous year’s actual collected revenue to the Federal Government. The advances must be fully repaid within the year, a measure aimed at preventing long-term fiscal imbalances and supporting macroeconomic stability.
This policy aligns with Nigeria’s Medium-Term Fiscal Framework (MTFF), ensuring that the CBN continues to implement consistent policies to mitigate fiscal shocks while managing expectations during the country’s ongoing economic recovery.
The document emphasized the importance of adhering to the 5% limit, stating, “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.”
The CBN’s decision signals its commitment to maintaining fiscal discipline despite increased pressure for more government borrowing.
