by President Bola Tinubu has announced that the federal government has paid off more than N30 trillion in loans provided through the Central Bank of Nigeria (CBN). These loans, known as “ways and means,” are short-term loans used by the government to cover budget gaps.
Speaking during a nationwide broadcast on Nigeria’s 64th Independence Day, Tinubu shared details on how his government is managing the country’s debt. Earlier this year, the National Assembly had approved the securitisation of a N22.7 trillion loan taken by former President Muhammadu Buhari, followed by an additional N7.3 trillion approved for Tinubu.
Nigeria’s total public debt has increased to N121.67 trillion in the first quarter of 2024. The Debt Management Office (DMO) said this rise is partly due to the loans taken through ways and means.
The Minister of Finance, Wale Edun, also stated that the government is no longer relying on these loans to handle external debt or other payments. President Tinubu said the country’s debt service ratio, which is the percentage of government revenue used to repay debt, has decreased from 97% to 68%.
“We have cleared over N30 trillion in ways and means debt and reduced the debt service ratio by 29%,” Tinubu stated.
In addition to paying off loans, Tinubu said his administration has cleared a backlog of $7 billion in foreign exchange (FX) and increased Nigeria’s foreign reserves to $37 billion, up from $33 billion 16 months ago.
Reforming the Economy
Tinubu explained that his government is making necessary changes to the economy to ensure it becomes stronger and more sustainable. He warned that if these fiscal problems, such as the high debt-to-GDP ratio, are not addressed, the country could face serious consequences.
“Our administration is focused on promoting free enterprise and ensuring that investment rules are fair and effective,” the president said. He also highlighted ongoing efforts to boost oil and gas production through reforms in the upstream petroleum sector.
The president also praised the Central Bank for taking a more disciplined approach to managing monetary policy, which has brought stability to the foreign exchange market.
Tinubu noted that his administration is working on new economic reforms, including the approval of economic stabilisation bills, which are designed to make Nigeria more business-friendly, attract investment, and reduce taxes for businesses and workers once they become law.
