The Federal Government has stated that it will no longer permit the Central Bank of Nigeria to print money through Ways and Means to pay the budget deficit in the face of revenue pressures on the 2024 national budget.
The Minister of Budget and National Planning, Atiku Bagudu, revealed this information in an interview with journalists in Lagos. He added that the government will also consider issuing bonds as a means of attracting private investments.
He stated: “The central bank will no longer print money for the government. If we borrow from the Central Bank, we will do so only to the degree permitted by law.”
According to the Minister, “The law allows us to borrow no more than 5% of the prior year’s revenue. What we’ve been doing wrong is exceeding that 5% restriction.
“And if we need to borrow, we’ll issue bonds. It is an option. People can invest. It even provides chance for some private investors who have money to acquire government bonds. Some people are looking forward to it.”
Bagudu explained why the budget included further borrowing despite the already large national debt: “Unfortunately, in our national life, some things cannot wait. We have several children.
“We want them to have an education. We face a security dilemma. We need additional feet on the ground. So, no matter how much you wish to reduce your borrowing, there is an irreducible minimum that you must meet.”
The Minister stated that Nigeria does not have the funds to meet that minimum, adding that some countries in the world collect 50% of their GDP as revenue and most European countries have around 30%. France accounts for approximately 50%. Italy, I believe, has 38%.
“Nigeria used to be the second lowest in the world. So once you don’t have revenue and you have an irreducible minimum commitment you are in trouble somehow”.
