• CBN financing deficit is highly inflationary, says DG, LCCI
• Could complicate efforts to bring inflation under control – FITCH
• Takes time to fix disparity between revenue and expenditure, says Prof. Ajibola
The Federal Government’s repeated recourse to Ways and Means (WM) facility with the Central Bank of Nigeria (CBN) has raised concerns about weaknesses in public finance management, complacency on the part of many revenue generating agencies who use most of the generated funds as overhead costs and excessive dependence on the apex bank for fiscal stability.
While it is not unusual for countries to resort to money creation to finance expenditure, as deployed by some in the bid to tackle the coronavirus pandemic, the Federal Government’s repeated recourse to this option is raising concerns in the economy. Some think this could further weaken institutional safeguards that preserve the credibility of policymaking and the ability of the central bank to control…
Source: Guardian Newspaper