The Minister of Finance and Coordinating Minister of Economy, Wale Edun, has attributed Nigeria’s current hyperinflation crisis to the excessive printing of currency by the Central Bank of Nigeria (CBN) between 2015 and 2023.
Edun made these remarks during an interface with the Senate Committee on Finance, shedding light on the dire consequences of the reckless printing of trillions of naira without corresponding productivity measures.
During the session, Edun highlighted that the staggering sum of N22.7 trillion printed through Ways and Means overdraft for the Federal Government during the said period had landed Nigeria into the bedlam of hyperinflation it faces today. He noted that the printing spree was not matched with productivity, exacerbating the inflationary pressures gripping the nation.
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Edun said, “We talked about inflation, and you have helped to solve that. Where has it come from?
“It came from eight years of just printing money not matched by productivity. It’s not like when you earn dollars, and you free the naira alongside it, although there’s even a better way than that. But that’s still not as bad.”
Edun’s disclosures come on the heels of the Senate’s resolution to probe the N30 trillion Ways and Means expenditure by the previous administration, which it deemed as reckless spending. The Minister pointed out that the unrestrained spending of the overdraft acquired from the CBN, under the tenure of Godwin Emefiele, significantly contributed to the prevailing food and security crises in the country.
“It’s not as if the money is matched by productivity increase in output. It is not. And what happened was that for eight years, the weak were left to their own devices. It is the privileged few that took everything,” Edun told the committee.
Acknowledging the Senate’s role in addressing the inflationary challenge, Edun outlined the government’s plan to raise N7 trillion to repay the Central Bank and stabilize the economy. He pledged to conduct a comprehensive audit of the aimless printing of N22.7 trillion, underscoring the administration’s commitment to accountability and fiscal prudence.
“You distinguished senators have helped. You have given us the mandate to raise N7tn, which we will do by sucking money from the market, using it to pay back the central bank and giving the government a balanced book. We are going to audit even the N22.7 trillion printed aimlessly,” he said.
Despite the grim economic situation, Edun expressed optimism regarding the government’s damage-mitigating policies, assuring that they would yield positive outcomes in terms of lower inflation rates and improved GDP growth. He lauded President Bola Tinubu-led government’s efforts in revenue generation, citing over N13 trillion generated from the non-oil sector in 2023.
“We should not be despondent. We have done the hard part. Mr. President, through the bold and courageous measures which are recognized around the world as being beyond the usual, what you would normally see.
“To so riskily and robustly change the things that are wrong. And it wasn’t just a set of measures. It’s not just lifting of subsidy here or margin of rates there. No. It is a strategic plan, the whole fiscal side, the government’s finances have been repaired,” he said.
The minister added that, with the help of the Senate, the federal government has increased revenue generation by blocking leakages orchestrated by import duty waivers,
“You, distinguished senators, have helped further to encourage and enroll the executive to further repair the finances, the fiscal situation of this country by endorsing and urging us to do something about the leakages in the import duty, waiver system. And we have explained to you what we will do. And even from your body language, I believe you feel that that is in the right direction,” he stated.
In his closing remarks, Senator Sani Musa, Chairman of the Committee, affirmed that the interactive session would be an ongoing exercise to monitor the government’s short-term and long-term plans to navigate out of the current economic predicament.
The present government faces the daunting task of restoring stability and confidence in the economy as Nigeria grapples with the repercussions of unchecked money printing under the past administration. Economists note that with concerted efforts and prudent fiscal management, there remains hope for a brighter economic future, albeit with considerable challenges ahead.