By Chinwendu Obienyi
The Central Bank of Nigeria (CBN) has reaffirmed its commitment to maintaining a 5% threshold for Ways and Means Advances to the federal government for the fiscal years 2024-2025.
According to the CBN’s Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines, these advances are capped at 5% of the previous year’s revenue, and must be repaid within the same fiscal year.
Ways and Means Advances allow the CBN to provide short-term loans to cover government budget deficits.
The policy aligns with Nigeria’s Treasury Single Account (TSA) system, which consolidates the cash positions of Ministries, Departments, and Agencies.
This mechanism has been controversial due to past misuse. In 2023, the Senate approved restructuring of N22.7 trillion in loans extended to the government through this facility.
The CBN Governor, Yemi Cardoso has since pledged to halt new advances until previous loans are repaid, with N7.3 trillion repaid so far.
Economic experts view this as the CBN’s effort to balance fiscal flexibility with long-term economic stability.
