Edun noted that to successfully pursue meaningful growth, the country would need to focus on three core areas to grow the economy by at least 3.5 per cent in 2024.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun has disclosed that the federal government used part of the Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 to pay down Ways and Means advances from the Central Bank of Nigeria (CBN) by N4.83 trillion.
Edun stated this in his paper presented at the Lagos Business School (LBS) Breakfast Club titled, “Reconstructing the Economy for Growth, Investment and Climate Resilience Development.”
The issue of the federal government’s debt to the apex bank has been a contentious topic, with estimates suggesting a staggering indebtedness of around N30 trillion. However, Edun emphasized the necessity for an audit to ascertain the precise amount owed.
OrderPaper recalls that in response to escalating apprehensions regarding the alleged utilization of the N30 trillion ways and means by the previous administration, the Senate established and inaugurated a committee to undertake a comprehensive investigation.
Additionally, OrderPaper recollects that the Senate announced that if the current leadership of the Central Bank of Nigeria (CBN) fails to offer necessary explanations, it will invite the former governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to explain the N30 trillion “Ways and Means” that President Muhammadu Buhari administration obtained while he was in office.
The upper chamber had on December 30, 2023, following President Bola Ahmed Tinubu’s request, approved and confirmed the securitisation of an outstanding N7.3 trillion Ways and Means advances
However, while presenting the paper, Edun disclosed that the federal government used part of the NTBs and Bonds issued in 2024 to pay down Ways and Means advances by N4.83 trillion arguing that going forward, output growth has to outstrip population growth.
According to him, as of December 2023, GDP growth was only marginally higher than population growth by less than 20 basis points (bps), depicting several years of sub-optimal growth and productivity adding that to successfully pursue meaningful growth, the country would need to focus on three core areas to grow the economy by at least 3.5 per cent in 2024.
These include increasing oil production to 2 million barrels per day (mbpd) (including condensate), ensuring that agriculture sector growth hits 3 per cent as opposed to 2.1 per cent in 2023, and boosting trade activities to support a positive current account.
He observed that to guarantee fiscal consolidation, increasing revenues is a critical driver for growth Edun said: “We have set out a robust execution plan for a 78% y-o-y increase in budgeted revenue in 2024 but implementing enhanced government’s revenue assurance model is critical. Target budget deficit of 3.9% of GDP from 6.1% in 2023.”
The coordinating minister explained that safeguarding oil revenues, increasing revenue contribution of ministries, departments and agencies (MDAs), Government Owned Enterprises (GOEs); growing non-oil revenue and optimisation of government assets were part of the fiscal consolidation measures being pursued by the government.
The finance minister also alluded to multiple medium-term initiatives to boost the supply of ‘sticky’ foreign capital.
These include presidential executive orders to boost the United States dollar liquidity, presidential directives in the oil and gas sector, repatriation of foreign-denominated assets into the formal financial sector, and local issuance of foreign-denominated Federal Government Bonds.
According to him, the measures expected to be implemented in the early second quarter of 2024 include oil and gas companies tax incentives, exemptions and remissions, among others; local content compliance for value as well as reduction of petroleum sector contracting costs and timelines.
Noting that generating trade surpluses consistently will be accretive to growth, the minister states that the Current Account Balance turned positive last year as exports improved, albeit marginally.
He pointed to plans to position the economy for strong regional trade through harmonised trade policies, enhanced financial systems and payments integration.
