"We inherited a reserve of over $33 billion 16 months ago. Since then, we have paid back the inherited forex backlog of $7 billion," he said.
President Bola Tinubu on Tuesday said that his administration adopted a disciplined approach in the management of Nigeria's monetary policy by reducing the debt service ratio significantly.
Mr Tinubu, who spoke in a televised Independence Day broadcast, said the approach adopted by the Central Bank of Nigeria to monetary policy management has ensured stability and predictability in the foreign exchange market.
"We inherited a reserve of over $33 billion 16 months ago. Since then, we have paid back the inherited forex backlog of $7 billion," he said.
"We have cleared the ways and means debt of over N30 trillion. We have reduced the debt service ratio from 97 per cent to 68 per cent. Despite all these, we have managed to keep our foreign reserve at $37 billion. We continue to meet all our obligations and pay our bills."
He noted that the nation is moving ahead with its fiscal policy reforms.
"To stimulate our productive capacity and create more jobs and prosperity, the Federal Executive Council approved the Economic Stabilisation Bills, which will now be transmitted to the National Assembly.
"These transformative bills will make our business environment more friendly, stimulate investment and reduce the tax burden on businesses and workers once they are passed into law," he said.
The federal government had, in the past, relied heavily on the loan facility to fund the budget.
As of 2023, the facility had surged over 2,900 percent over the past seven years, reaching an unprecedented N23.7 trillion. This sharp rise, which breached legal limits, fuelled inflationary pressures and exacerbated Nigeria's debt burden.
Earlier in the year, the Governor of the CBN, Yemi Cardoso, announced that the bank would cease issuing Ways and Means advances to the federal government until outstanding loans were repaid.
Mr Cardoso highlighted this as one of the critical measures the bank has adopted to address the country's current economic challenges.
In July, the Debt Management Office (DMO) said Nigeria's total public debt stock hit N121.67 trillion (91.46 billion dollars) in March 2023.
The DMO said that the securitisation of N4.90 trillion as part of the securitisation of the N7.3 trillion Ways and Means Advances approved by the National Assembly was also partly responsible for the N24.33 trillion increase in the debt stock.
In September, the CBN said it will continue to maintain the constitutional limit on Ways and Means Advances to the federal government, capping the advances at 5 per cent of the previous year's actual revenue collection.
This limit is part of the CBN's monetary, credit, foreign trade, and exchange policy guidelines for the fiscal years 2024-2025.
In line with the Treasury Single Account (TSA) framework, the new guidelines also stipulate that the calculation of these advances will now take into account the sub-accounts of Ministries, Departments, and Agencies (MDAs), which are linked to the Consolidated Revenue Fund (CRF).
This means that the federal government's consolidated cash position will be more accurately reflected, providing a clearer picture of available resources and enhancing transparency in public financial management.
Forex backlog controversies
In November 2023, the International Air Transport Association (IATA), criticised Nigeria and other African countries for not allowing international airlines to repatriate their profits.
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The group said trapped funds in African countries is currently estimated at $1.68 billion, noting that the challenge is impeding the growth and development of air transportation on the continent.
As of August 2022, reports indicated that foreign airlines' funds trapped in Nigeria stood at $793 million amidst lingering forex scarcity.
Of this figure, $300 million is said to be legacy debt, which the CBN has taken, but yet to be remitted to IATA on behalf of the airlines.
This prompted some major airlines, particularly Emirates Airline, to suspend flights operations in the country.
Last June, IATA, a top global trade association of airlines, said that 98 per cent of airlines' trapped funds in Nigeria have been cleared.
In March, the CBN also announced that the government had cleared all 'valid' foreign exchange backlogs. The move prompted Emirates airlines to announce that it will resume flight services to Nigeria from 1 October.
