Minister Bagudu Declares Strategic Shift in Budget Funding Approach
In a significant policy announcement on Thursday, the Minister of Budget and National Planning, Atiku Bagudu, revealed that President Bola Ahmed Tinubu’s administration would no longer permit the Central Bank of Nigeria (CBN) to utilize the ‘Ways and Means’ method for generating funds to address the budget deficit.
Instead, the government is set to embrace a new strategy involving the issuance of bonds, a move aimed at attracting private investments.
Ceasing Money Printing by the CBN
Minister Bagudu, speaking during a press briefing in Lagos, emphasized that the government would cease the practice of the CBN printing money to fund its operations.
This decision comes against the backdrop of financial challenges faced by the 2024 national budget.
Bagudu clarified that if the government were to borrow from the CBN, it would strictly adhere to the legal limits set, specifically not exceeding 5% of the previous year’s revenue.
Transition to Bond Issuance and Private Investments
The Minister explained that, according to the law, the government is allowed to borrow within set limits, and the mistake has been exceeding the 5% threshold.
Bagudu asserted that the government’s preference would now be issuing bonds, providing an opportunity for private investors to participate.
He emphasized the significance of adhering to legal constraints and fostering transparency in financial operations.
Budget Adjustments and National Assembly’s Role
Addressing the adjustments made to the Federal Government’s budget for 2024, Bagudu acknowledged alterations by the National Assembly, which included additional funds under the assumption of surpassing initial budget projections.
He highlighted the collaborative nature of the democratic process and stressed the need for oversight and interrogation to achieve set financial thresholds.
Balancing Borrowing and Irreducible Minimum Commitments
Minister Bagudu candidly discussed the rationale behind the budget’s provision for increased borrowing despite the existing high national debt.
He underscored the need to meet essential commitments, such as education and addressing security challenges, stating that some financial obligations cannot be delayed.
Bagudu acknowledged the revenue challenges faced by the country and urged vigilance in achieving financial goals.
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