Business
CBN Maintains 5% Ways and Means Advances to Government Despite Legislative Amendment
The Central Bank of Nigeria (CBN) has confirmed it will continue to provide Ways and Means Advances to the Federal Government at a five per cent limit, despite a recent bill by the National Assembly raising the ceiling to 10 per cent. This information was revealed in the CBN’s Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the 2024-2025 fiscal years, published on Tuesday.
Under the CBN guidelines, the bank can lend up to five per cent of the previous year’s actual collected revenue to the government, with the requirement that the loans must be repaid within the same year to avoid long-term fiscal strain.
The CBN’s decision contrasts with the National Assembly’s bill, which sought to increase the borrowing limit from five to 10 per cent. However, the apex bank emphasized the importance of adhering to its guidelines to maintain macroeconomic stability.
“The Ways and Means Advances shall continue to be available to finance deficits in the government’s budgetary operations to a maximum of five per cent of the previous year’s actual collected revenue,” the CBN said in the document. The advances are expected to be repaid by the end of the year they are granted.
The CBN also stressed that these advances would be determined after recognizing the sub-accounts of various ministries, departments, and agencies (MDAs) linked to the Consolidated Revenue Fund, ensuring a more accurate federal cash position.
Ways and Means Advances serve as temporary loan facilities to cover shortfalls in government revenue and are regulated by Section 38 of the CBN Act, 2007.
The CBN’s decision follows controversy in 2023 when former CBN Governor Godwin Emefiele allegedly approved N22.7 trillion in loans to the government without National Assembly approval. This move was widely criticized for contributing to inflation and excess liquidity in the economy.
In response to the ongoing economic challenges, current CBN Governor Olayemi Cardoso told the Senate in February 2024 that the CBN would halt further advances to the government until previous loans were repaid. Minister of Finance Wale Edun recently announced that N7.3 trillion of the outstanding advances had been repaid.
The CBN’s 218-page document also highlights risks for the 2024/2025 fiscal year, including the removal of fuel subsidies, rising external debt servicing obligations, and potential challenges to external reserves growth.
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.
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.
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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