World Bank warns FG against borrowing from CBN

If Nigeria wants to lower the strain of inflation on the economy, the World Bank Group has encouraged it to limit government borrowing from the Central Bank.

Alex Sienaert, the lead economist for Nigeria at the World Bank, said this on Thursday during a Lagos Business School economic assessment session.

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In his keynote address, Sienaert praised the administration for its recent economic changes but pointed out that these reforms needed to be maintained for the economy to recover from the shocks it is currently experiencing and have significant growth in the near term.

He said, “The whole agenda of tackling inflation is obviously a huge one. Some ideas include reducing subsidised CBN lending to medium and large firms and the government borrowing from CBN.

“All of these things increase the money supply and reducing that will be helpful to reduce inflation, and then replacing imports with FX restrictions with tariffs.”

According to him, the fact that petrol price had significantly increased created pressure on the economy.

He added that a variety of solutions would have to be devised in order to mobilise more revenue a way that spending would be increased to tackle the real priorities in the country.

He also stated that the Federal Government’s planned to disburse N8,000 as palliatives following the removal of fuel subsidy will increase the available earnings and income of about 50 per cent of Nigerians by 10 per cent.