Do you know that the federal government has cleared all outstanding debt of the Central Bank of Nigeria (CBN)?
We know the Nigerian economy is facing so many challenges, yet this administration has successfully cleared all CBN debts.
This is because having debt hangover your head as a nation is not a good sign for investors.
So, to woo investors and revive the economy, President Tinubu has ensured the clearing of all CBN debts.
The outstanding debt of the Central Bank of Nigeria (CBN) has been cleared to boost investor confidence and rapidly develop the economy.
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According to the Minister of Finance, Wale Edun, the federal government cleared the debt.
Edun announced the allocation of ₦4.83 trillion from Treasury Bills and Bonds to settle the outstanding CBN debt.
This strategic move marks a shift towards using public domestic debt instruments to manage and service existing financial obligations.
In 2023, the government obtained ₦2.94 trillion from the CBN, showcasing a proactive approach to financial management.
Investor Attraction And Economic Stability
The government’s financial instruments, particularly NTBs and Bonds, have witnessed increased demand from investors, driven by the CBN’s attractive interest rates and strong defense of the naira.
Minister Edun highlighted the enormous interest payout expected, with the CBN incurring about ₦1.01 trillion.
The first quarter of 2024 saw a total subscription for government securities reaching ₦21.17 trillion, indicating a rebound in investor confidence and demand for Nigerian financial assets.
Fiscal Management and External Debt Servicing
The Ways and Means provision, a financial mechanism allowing short-term funding from the CBN, was significantly utilized, with the National Assembly securitizing ₦22.7 trillion of such advances.
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Most importantly, this fiscal maneuver is part of Nigeria’s broader strategy to manage cash shortfalls and external debt obligations efficiently.
The increase in external debt servicing, as reported by the Debt Management Office, underscores the government’s commitment to fulfilling its international financial commitments.
Besides this effort at clearing the CBN debt, there are times that government policies are inimical to progress.
You can learn about some of the government’s policies that affect the growth of the economy in this video below
How SOme Government Policy Affects The Economy
