Wale Edun, Nigeria’s minister of finance and coordinating minister of the economy, on Thursday said the fiscal authority is complementing the efforts of the Central Bank towards ensuring the stability of the economy through the issuance of N8 trillion in government securities specifically, treasury bills and treasury certificates.
He disclosed this in an interview with BusinessDay, joined by other journalists, during the International Monetary Fund (IMF)/World Bank spring meetings in Washington D.C., United States of America.
Speaking on the collaboration between the fiscal authority and the Central Bank of Nigeria (CBN), Edun highlighted the crucial role of these securities in attracting foreign investment.
“A large part of the securities that have been sold, the dollars come and they get naira in exchange, and use that naira to invest in securities,” Edun explained. “Out of N8 trillion that has roughly been issued in securities by the CBN and ministry of finance, the majority has come from treasury bills, treasury certificates.”
Edun emphasised the complementary nature of the efforts between the CBN and the fiscal authorities in stabilising the economy. “It is showing the complementarity of the CBN, signalling by the fiscal authorities rising to the challenge of providing enough merchandise for foreigners to bring their dollars and invest in naira securities,” he stated.
Furthermore, Edun highlighted additional measures taken to address economic challenges, including inflation control. “Another example of the complementarity is that the CBN is tightening the money supply in order to achieve its goal of driving down inflation,” he noted. “The fiscal side to complement that effort includes a paying down of ways and means to alleviate the pressure from excess money in the system on a price level.”
Edun underscored the collaborative efforts between the two authorities in pursuit of common goals. “The two authorities [CBN and fiscal authorities] are working hand in hand towards the common goal of stabilizing the Nigerian economy, bringing down inflation, stabilizing forex, with the target of bringing down interest rates,” he said.
Responding to questions regarding borrowing between the CBN and the federal government, Edun clarified that no such transactions have occurred under the current administration. This statement reaffirms the government’s commitment to fiscal responsibility and transparency.
The issuance of N8 trillion in treasury bills marks a significant step towards reinforcing Nigeria’s economic resilience amidst global economic uncertainties. With concerted efforts from both monetary and fiscal authorities, Nigeria aims to create a conducive environment for sustainable growth and investment.
Responding to a question on taxation, Edun said, If you look at the 2024 budget it has a significant 60 – 70 percent increase in overall government revenue projected because we need to borrow less and focus more on domestic resource mobilisation from taxes and other government revenue and in particular from oil revenue.
“So within that context, taxation without necessarily increasing the rate of taxes but improving the rate of efficiency of administration and collection is the way to shore-up government revenue in a non-inflationary manner.