Business
US Govt To Run Short Of Cash By Oct 17
The United States Trea
sury Secretary, Jack Lew said last Wednesday that he now estimates he will have less cash on hand to pay the country’s bills in mid-October than he previously thought.
Instead of the $50 billion he estimated a few weeks ago, he now thinks the cash balance will be closer to $30 billion, according to a CNN report.
“This amount would be far short of net expenditures on certain days, which can be as high as $60 billion,” Lew said in a letter to lawmakers. “If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.”
He also said he now estimates the so-called extraordinary measures that the Treasury Department has been taking since the spring will be exhausted no later than October 17.
Lew also noted, as he has in the past, that his estimates are based on a number of factors that are not entirely predictable — such as the amount of revenue flowing into federal coffers on any given day.
Treasury handles about 80 million payments a month. Those payments are not evenly spaced out. So on some days more is owed than on others.
And by mid-October, if Congress hasn’t raised the borrowing limit, Treasury will only be able to pay the bills that come in with the cash it has on hand plus whatever revenue comes in.
Payments include IRS refunds, Social Security and veterans benefits, Medicare reimbursements for doctors and hospitals, bond interest owed investors, payments to contractors and paychecks for federal workers and military personnel.
Based on Lew’s latest estimate, the Congressional Budget Office now projects Treasury may exhaust its cash balance and therefore no longer be able to pay all the country’s bills in full and on time sometime between October 22 and October 31. The CBO, however, also said the “x” date — as it’s known — could “fall outside that range.”
Those projections are sooner than CBO had been anticipating a few weeks ago. Among other reasons, corporate tax receipts have fallen short of expectations since then.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.