Nigeria Vows to Shun Central-Bank Cash Amid Budget Squeeze

The Nigerian federal and state governments need to cut back spending to deal with a drop in revenues instead of depending on the central bank for financing, Finance Minister Zainab Ahmed said on Monday, Bloomberg News reported. Ahmed denied claims by a state governor that the central bank printed money to make up a 50 billion naira ($122 million) shortfall on federal revenues earmarked for the 36 federal states in March. “We will make sure that we don’t have to do that,” Ahmed said in an interview with the National Television Authority. “As a nation, the federal, state and local governments must review expenditure patterns. We are spending too much and we are not generating enough.” Nigeria emerged from its second recession in four years in the fourth quarter, but revenues remained subdued as a fall in crude prices curbed the main source of income for Africa’s top oil producer. Ahmed said the government aims to triple its revenue ratio to 15% of gross domestic product. After revenue collapsed during the last oil shock of 2015, Nigeria turned to the central bank, borrowing about a third of its debt from the Abuja-based lender to cover a budget deficit that tripled during that time. Ahmed has said that the government will limit deficit monetization and convert those loans into long-term notes. Read more.