IMF tells FG to conclude securitisation of N23.7trn loan from Central Bank of Nigeria

As the Nigerian economy continues to get battered by the twin challenges of naira scarcity and shortage and high cost of fuel at the tilling stations, the International Monetary Fund (IMF) has asked the federal government to speed up the finalisation of the securitisation of the Central Bank of Nigeria (CBN’s) existing stock of overdrafts (also known as Ways and Means financing).

This wise counsel is contained in a statement issued on Wednesday after its 2022 Article IV consultation with Nigeria.

The federal government has been borrowing from the CBN through “Ways and Means”, which is a loan facility through which the CBN finances the government’s budget shortfalls.

TMY Newspapers recalls that last December , President Muhammadu Buhari requested for senate approval of the restructuring of N23.7 trillion Ways and Means Advances given to the government by the CBN.

But the senate asked that before it could approve the request, it must have the details of what the funds were spent on.

According to the statement by the IMF, “Directors also urged the authorities to finalize securitization of the CBN’s existing stock of overdrafts and emphasized that the CBN’s budget financing should strictly adhere to the statutory limits.

“Directors encouraged a continued move toward a unified and market-clearing exchange rate by dismantling various exchange rate windows at the CBN.

“Providing clarity on exchange rate policy would help boost investor confidence, quell capital.”

The global lending body also urged the Central Bank of Nigeria apex bank to be ready to further raise the policy rate if needed.

IMF said that despite rising oil prices, the nation’s fiscal deficit was estimated to have widened further in 2022 due to high fuel subsidy costs.

Preferring solutions to the rising price of fuel, IMF implored Nigerian authorities to deliver on their commitment to remove fuel subsidies by mid-2023, and to increase well-targeted social spending.