The Minister of Budget and National Planning, Atiku Bagudu, has revealed that the Federal Government is discontinuing the practice of Central Bank of Nigeria (CBN) printing money through Ways and Means to address budget deficits.
Speaking with reporters in Lagos amid revenue challenges for the 2024 national budget, Bagudu explained that the government would now turn to issuing bonds, a move that would attract private investments.
He stated, “The central bank is not going to print money for the government anymore. If, to the extent that we would borrow from the Central Bank, it is going to be within what the law allows. The law allows that we can borrow but not more than 5% of the previous year’s revenue. What we have been doing wrong is to go beyond that 5% limit.”
Bagudu emphasized that, if necessary, borrowing would be done through the issuance of bonds, offering an opportunity for private investors to participate. He highlighted, “It even provides an opportunity for some private investors who have money to buy government bonds. There are those who are looking forward to it.”
The Federal Government’s 2024 budget had projected a deficit of N9.2 trillion, approximately 3.9 percent of the GDP. However, the National Assembly adjusted figures in key revenue lines, anticipating higher oil revenue and exchange rate gains than initially budgeted.
Addressing this development, Bagudu remarked, “We chose democracy, and democracy has opportunity cost. We have seen budget shutdowns in advanced democracies, particularly the US, because power is split and given to different institutions.”
Regarding the increased budget despite existing high national debt, Bagudu acknowledged the urgency of certain expenditures, such as education and addressing security challenges. He emphasized the need for an irreducible minimum of spending, citing the country’s comparatively low revenue collection compared to other nations.
“In our national life, some things cannot wait. We have many children. We want them to have education. We have a security challenge. We need more feet on the ground. So as much as you would want to cut back on borrowing, there’s an irreducible minimum that you need to do,” he concluded.