The Federal Government said it intends to repay the Ways and Means Advances from the Central Bank of Nigeria (CBN) with proceeds from Nigerian Treasury Bills (NTBs) and Bonds issued in 2024.
It said about N4.83 trillion had been allocated for the settlement.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this known in a presentation at the Lagos Business School (LBS) Breakfast Club.
In the paper titled “Reconstructing the Economy for Growth, Investment and Climate Resilience Development,” Edun underscored the government’s strategy of increasing the pricing of government securities, which has successfully attracted dollar inflows but at a higher cost to the government.
The CBN recently stated that over 75 per cent of bids received during the auctions of government securities held on March 1 and 6, 2024, were from foreign investors, indicating their interest in Nigeria’s financial instruments.
Higher interest rates are typically employed to control inflation; they make borrowing more expensive, thereby tempering spending and investment, which, in theory, should reduce the upward pressure on prices.
The higher rates also tend to attract foreign investors seeking better yields, leading to an inflow of foreign currency, which can help stabilise and potentially strengthen the Naira.
This, however, comes at a cost and has the potential to limit the central bank’s capacity in other areas, such as developmental lending or currency interventions.
