Business
CBN Maintains 5% Limit on Ways and Means Advances
The Central Bank of Nigeria (CBN) has confirmed that it will continue to cap its Ways and Means Advances to the Federal Government at 5% for the fiscal years 2024-2025. This decision is outlined in the Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines published on Tuesday.
This move contrasts with recent National Assembly legislation that increased the borrowing limit from 5% to 10%. Under the new guidelines, the CBN will advance up to 5% of the previous year’s revenue, which must be repaid within the fiscal year to avoid long-term fiscal burdens.
The CBN’s decision aligns with the Medium-Term Fiscal Framework (MTFF), aiming to manage expectations and support macroeconomic stability. The policy stipulates that these advances are to be repaid as soon as possible and definitely by the end of the year in which they were granted.
In addition, advances will now be determined by considering the sub-accounts of various MDAs linked to the Consolidated Revenue Fund, reflecting the Federal Government’s consolidated cash position.
The Ways and Means Advances are utilized by the CBN to cover temporary budget shortfalls. The CBN Act of 2007 permits the bank to grant such advances at its discretion. Controversy arose in 2023 when former CBN Governor Godwin Emefiele allegedly printed N22.7 trillion without National Assembly approval, contributing to inflation.
Current CBN Governor Olayemi Cardoso announced that the bank would halt new advances until previous loans are repaid, a measure aimed at addressing the country’s economic issues. Finance Minister Wale Edun recently disclosed that the government had repaid N7.3 trillion of these advances.
The CBN’s guidelines also highlight potential challenges for the fiscal year, including fuel subsidy removal, lower import bills, and rising external debt servicing obligations, which could impact external reserves growth.
Business
Shehu Sani Criticizes World Bank Over Nigeria’s Economic Outlook
Former Kaduna Central Senator Shehu Sani has criticized the World Bank for worsening Nigeria’s economic difficulties. In a post shared on X, Sani accused the institution of projecting that Nigeria’s hardship would extend for another 15 years before the country could reach a better economic future. He questioned how many Nigerians would be left to enjoy that future, and how many African nations the World Bank has successfully helped to prosperity.
Sani’s remarks follow the World Bank’s latest *Africa’s Pulse* report, which forecasts that the Nigerian Naira will be among the worst-performing currencies in Sub-Saharan Africa by August 2024. The report placed the Naira’s decline alongside that of the Ethiopian Birr and South Sudanese Pound.
Business
HIG: Building Trust and Driving Innovation in Nigeria’s Insurance Market
Heirs Insurance Group (HIG) recently announced impressive financial results for the 2023 fiscal year, marking significant growth across all key metrics. The Group’s Gross Written Premium (GWP) surged by 59.3%, from N19.9 billion in 2022 to N31.7 billion in 2023. This remarkable performance underscores HIG’s resilience and operational efficiency, further solidifying its position as one of Nigeria’s fastest-growing insurance firms.
Heirs General Insurance (HGI) saw a 77% increase in GWP, reaching N12 billion in 2023. HGI’s profit before tax (PBT) also rose by 203%, reflecting the company’s effective cost management. Similarly, Heirs Life Assurance (HLA) reported a 71% GWP increase and a staggering 395% rise in PBT. Both companies have demonstrated a strong commitment to customer satisfaction, disbursing billions in claims.
Beyond financial success, HIG actively engages in corporate social responsibility (CSR) projects, contributing over N100 million to education, community development, and financial literacy. With plans for future expansion and innovation, HIG is poised to remain a key player in Nigeria’s evolving insurance market.
Business
Wike Urges Nigerians to Pay Taxes for Improved Social Services
Federal Capital Territory (FCT) Minister, Nyesom Wike, has called on Nigerians to fulfill their tax obligations, emphasizing that government revenue is essential for delivering social services. Wike made this appeal during the inaugural Abuja Business and Investment Summit, held in Abuja on Wednesday.
Speaking on the summit’s theme, “Optimising Investment Through Partnerships,” Wike stressed the importance of collaboration to generate investment opportunities. He dismissed the misconception that the government does not need revenue, explaining that taxes are crucial for funding public services.
Wike reiterated that both investors and the government must benefit from such partnerships, ensuring that both parties “go home smiling” through a fair exchange of services and taxes.
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