CBN Governor Announces Sharp Reduction in Ways and Means Advances
The Central Bank of Nigeria (CBN) has drastically reduced its Ways and Means advances to the Federal Government, slashing the balance to N2.84 trillion as of January 2026. This marks a significant decline from the peak of N26.95 trillion recorded in May 2023, according to CBN Governor Yemi Cardoso.
Economic Stabilization and Policy Challenges
Cardoso made this announcement during the 2026 Monetary Policy Forum in Abuja, where he highlighted that Nigeria's macroeconomic outlook is showing its strongest signs of stabilization in years. However, he cautioned that beneath the improving headline numbers lies a delicate balancing act, with the economy fraught with trade-offs that will test policy discipline.
"While disinflation marks a significant policy win, it has come at a cost," Cardoso noted. "Interest rates remain elevated, credit conditions tight, and key sectors of the economy continue to grapple with the impact of restrictive monetary policy."
Contractors Negotiate N150 Billion Debt with Federal Government
In a related development, contractors under the All Indigenous Contractors Association of Nigeria (AICAN) have extracted a positive response from the Federal Government regarding a N150 billion debt. This debt represents balances for capital projects executed across various states, including the Federal Capital Territory, in 2024.
AICAN President Jackson Nwosu confirmed that negotiations are ongoing after a meeting with the Minister of Finance, Wale Edun. The contractors had threatened to stage a protest at the All Progressives Congress national convention over delayed payments.
"The outcome of our meeting with the minister is positive," Nwosu disclosed. "However, we hope the government will honour its commitments."
Government Proposes Phased Payment Plan
The Federal Government has proposed to pay 35 per cent of the N150 billion immediately, with the balance to be paid in phases in the coming weeks. Contractors have been directed to obtain their batch numbers from relevant Ministries, Departments, and Agencies, although Nwosu noted that the timeline given was too short.
"We have been asked to inform our members to get their batch numbers from the MDAs," he explained. "Those without them will need to obtain new warrants, as previous batch numbers have been updated for the new fiscal year."
Reserves and Fiscal Discipline
Cardoso also revealed improvements in Nigeria's reserves, with gross reserves climbing to $50.12 billion and net reserves surging from just $3.99 billion at the end of 2023 to $34.80 billion in 2025. The sharp reduction in Ways and Means advances signals a return to fiscal discipline and a reassertion of the CBN's independence.
Ways and Means is a CBN financing facility used to cover Federal Government budget shortfalls when revenue falls short. While intended as a temporary mechanism, its massive unauthorized use had previously fueled inflation and currency devaluation.
