Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced that the federal government has officially exited the practice of servicing its debts through the Central Bank of Nigeria’s (CBN) Ways and Means facility.
Speaking at the 2024 Access Corporate Forum, themed ‘Nigeria’s Economic Rebirth: Hopes and Implications,’ Edun’s statement comes shortly after the CBN confirmed it would maintain its Ways and Means advances to the federal government at a 5 per cent limit for the 2024-2025 fiscal year. This facility has historically been used to cover budget shortfalls.
Edun emphasized that the government will no longer approach the CBN for domestic or foreign debt servicing, stating, “We have exited Ways and Means. This means the government will not debit the consolidated revenue fund to pay off these debts, which has often meant printing money.”
He also highlighted the development of a robust treasury and liability management system, backed by President Tinubu, to enhance Nigeria’s financial management.
The minister shared that the government’s economic stabilization plan aims to strengthen the benefits of ongoing reforms. Additionally, he announced initiatives to mobilize 360,000 farmers to cultivate an equal number of hectares, targeting a harvest of 1.4 million metric tonnes of maize, wheat, and cassava, asserting, “We must produce the food we consume.”
To support manufacturers, Edun noted that fiscal measures are in the pipeline, and the economic management team will be reconvened to finalize the government’s economic strategy.
Plans are underway to simplify the tax structure for businesses, to reduce the number of taxes to a single digit. “Ninety per cent of our tax revenue comes from less than 10 taxes,” he explained. The government is also working to lower corporate income tax rates to encourage investment and economic growth. Furthermore, essential goods such as food, pharmaceuticals, and health products will be exempt from VAT, while taxes on luxury items will see an upward adjustment.
