Argentine President, Javier Milei has vowed to propose a bill to jail any Central Bank official who orders the apex bank to print money to cover the nation’s deficits.
Milei said this on Thursday, February 22, in an interview with local news broadcaster TN.
He said it was necessary to stop the printing of more bills in a bid to control inflation, which currently exceeds 200% annually.
In the bill proposed by Milei, seigniorage, which is defined as the profit made by a government when it issues currency, would become a criminal offence with the objective of not being “able to issue money to finance the treasury”.
“The bill will define seigniorage as a criminal offence and in case the Central Bank finances the treasury, either directly or indirectly, the president of the Central Bank, the board of directors, the president of the nation and the officials who vote for it would end up in jail,” Milei said during an interview.
“We have a strong commitment in the fiscal area, zero deficit is not negotiable.
“If you have zero deficit, you do not take on more debt. By not taking on more debt, the debt–product ratio becomes constant or decreasing and the counterpart of that is that you become more solvent.”
Only weeks into his term, Milei’s reforms gained applause last week as the government recorded its first budget surplus in over a decade.
Milei’s reforms which included slashing bureaucracy, eliminating government publicity campaigns, reducing transportation subsidies, pausing all monetary transfers to local governments, and devaluing the peso, resulted in the $589 million budget surplus.
Like the South American nation, Nigeria suffers from high inflation, currency volatility, and external debt.
Nigeria’s former Central Bank governor, Godwin Emefiele has been in the eye of the storm for allegedly turning the apex bank into the immediate-past Muhammadu Buhari administration’s Automated Teller Machine (ATM).
In 2021, Governor Godwin Obaseki of Edo State said the Federal Government through the CBN printed N60 billion as part of federal allocation for March.
In a pushback, Emefiele said the money was meant as a loan from the apex bank, urging the Edo governor to stop the “mischief”.
In 2023, former Senator for Kaduna Central, Shehu Sani called for a probe of the CBN under Emefiele, saying he ran the apex bank as an “Automated Teller Machine of the Cabal, a canteen and cash cow.”
On Tuesday, February 20, the Nigerian Senate resolved to probe a N30 trillion Ways and Means extended to the Buhari-led Federal Government by Emefiele’s CBN.
The Red Chamber stated that reckless spending of the overdraft facility largely accounted for food and security crises currently facing the country.