- Title: Nigeria government halves central bank borrowing - Finance Minister
- Date: 19th April 2024
- Summary: WASHINGTON, D.C., UNITED STATES (APRIL 18, 2024) (REUTERS) (SOUNDBITE) (English) NIGERIA FINANCE MINISTER, WALE EDUN, SAYING: "And so far we've actually brought down, what I would call the overdraft at Central Bank, and brought it down from 8 trillion naira to just about 4 trillion naira now. And we have line of sight of bringing it down by another 2 trillion naira, chiefly by taking on the responsibility and the challenge of raising funds through the market, which is the correct thing to do for the system as a whole, and in order to keep the money supply in check and play our own part in that important fight against inflation." WHITE FLASH (SOUNDBITE) (English) NIGERIA FINANCE MINISTER, WALE EDUN, SAYING: "We are allowed an element of funding by the central bank. It's just that it had gone way above the limit. So our commitment was actually to do our level best to come down to within the limit and stay there. And very shortly, we will clearly have a line of sight of that limit." WHITE FLASH (SOUNDBITE) (English) NIGERIA FINANCE MINISTER, WALE EDUN, SAYING: "Under President Bola Ahmed Tinubu, the central bank is autonomous by statute, and the President intends to being a man who sticks to the rule of law, intends to live up to both the spirit and the letter of the Central Bank Act." WHITE FLASH (SOUNDBITE) (English) NIGERIA FINANCE MINISTER, WALE EDUN, SAYING: "I think it is one government under one president, and so he sets the direction of travel, he sets the overall economic goals, and we work towards them. And as we know, Central Bank has set an inflation guidance, at least for 2024, and we all have a role to play in following that guidance. And in the case of the fiscal authorities, the elevated interest rates, that signal by central bank, we've made that challenge by funding ourselves at those higher levels because the benefit is the inflow of foreign exchange. And so, I suppose that speaks to our own contribution to stabilization of the exchange rate." WHITE FLASH (SOUNDBITE) (English) NIGERIA FINANCE MINISTER, WALE EDUN, SAYING: "Well, I think we're always interested in managing our liabilities, maximizing funding sources, and of course, one of them that has even opened up again, is the Eurobond market. Benin Republic has gone, Cote d'Ivoire has gone, and I think even Kenya. So it is something that we have in our sights. We have our international advisors and our usual managers and bookrunners and we're listening to them. And I think perhaps it's the question of when and that market timing is a skill which they are very, very good at. And so we're listening to them whilst getting ready to take the opportunity that suits us best in our approach in the international market. But we believe it's open for us and we we are happy that we do have that as an option." JOURNALIST: "Could it be this year?" EDUN: "It could, but then again, it may not be. Honestly, timing is a function of the markets. And as you can see, everything, the fed funds rate and interest rate, is very unclear what's going to happen next and when."
- Embargoed: 3rd May 2024 06:30
- Keywords: Bola Tinubu IMF Nigeria Wale Edun economics market money naira
- Location: WASHINGTON, D.C., UNITED STATES
- City: WASHINGTON, D.C., UNITED STATES
- Country: Nigeria
- Topics: Africa,Government/Politics
- Reuters ID: LVA001631218042024RP1
- Aspect Ratio: 16:9
- Story Text:EDITORS PLEASE NOTE: THIS EDIT INCLUDES WHITE FLASHES
Nigeria has halved government borrowing from the central bank, Finance Minister Wale Edun told Reuters in an interview on Thursday (April 18), as Africa's biggest economy works to curb monetary financing and turn to markets to plug revenue shortfalls.
President Bola Tinubu, who inherited an economy struggling with record debt, high unemployment, subsidies and large central bank financing promised to make the bank autonomous and more focused on its core mandate.
Central bank overdrafts to the federal government, so-called "ways and means", were popular with the previous administration, peaking at $53 billion in 2023 and fuelling inflation and budget deficits.
Edun announced in January that the practice will stop.
Edun also added that Nigeria could return to international capital markets this year.
Ivory Coast, Benin and Kenya have all been issuing bonds this year as international capital markets have reopened to Sub-Saharan Africa issuers. This followed a near-two year hiatus after the fallout from COVID-19, Russia's war in Ukraine and rising global interest rates made foreign currency debt prohibitively expensive for most from early 2022 onwards.
Edun said the government was listening to its advisor on appropriate time issue.
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