EXCLUSIVE: Senate probe in limbo as documents show ways and means was N7.5trn — NOT N30trn — under Buhari

Ways and means advances by the Central Bank of Nigeria (CBN) to the administration of President Muhammadu Buhari amounted to N7.5 trillion as at December 2022, according to official documents seen by TheCable.

This is significantly lower than the N30 trillion reported by the senate joint committee on banking, finance, national planning, agriculture and appropriation which led to the setting up of a probe panel headed by Isah Jibrin (Kogi east).

Ways and means is a loan facility through which the CBN finances the federal government’s budget shortfalls.

The CBN law limits advances under ways and means to 5 percent of the previous year’s revenue, but this has been observed mostly in the breach over the years.

This way of financing government deficits usually results in macroeconomic instability, leading to inflation and high exchange rates because of the excess liquidity injected into the economy.

THE BREAKDOWN

Documents seen by TheCable show that as at December 19, 2022, the total outstanding overdraft to the federal government in its “treasury subtreasury account” at the CBN was N22,719,703,774,306.90.

This was made up of N7,531,819,048,929.66 as ways and means, N13,725,408,432,557.50 as total costs of transactions on federal government securities in the capital market, and N4,618,829,652,047.41 as interest charges on the overdraft facility.

The loans were not reflected as part of the debt stock of the federal government until December 2022 when the Buhari administration officially requested the national assembly to do so.

TheCable understands that there were only three requests for ways and means by Buhari throughout his tenure, even though the facility was disbursed more than thrice — some automated because of the sovereign risk on securities.

The biggest amount — nearly N2 trillion — was disbursed in 2020 during the COVID-19 outbreak when government revenues fell as a result of the lockdown. The federal government got loans from the CBN for intervention programmes during the pandemic.

The next biggest amount was in 2022 when N1,473,618,756,185.62 was advanced to the federal government. It was the same year Russia invaded Ukraine, leading to a spike in food prices globally.

In 2019 — the year Buhari was elected for a second term in office — N1.4 trillion was provided to the federal government via ways and means.

One of the biggest beneficiaries of the overdraft was the Nigeria Bulk Electricity Trading (NBET), which got N1.3 trillion under the “payment assurance facility” to keep the Nigerian electricity supply industry (NESI) “liquid”.

Two private power generation companies — Azura Power West Africa and Accugas Limited — got steady payments from the federal government under the controversial “take or pay” arrangement.

Azura gets $30 million monthly while Accugas receives $10 million, also monthly.

Nigeria’s credit rating is at risk if there is a failure to meet up with the payment obligations to Azura and Accugas in two of the most curious cases of sovereign guarantee hanging on the nation’s neck.

The Niger Delta Power Holding Company (NDPHC) also got huge funds from the overdraft.

SENATE PROBE IN LIMBO

Olayemi Cardoso, who succeeded Emefiele as CBN governor, said in February 2024, that the bank would no longer grant ways and means advances to the government “until all outstanding debts are refunded”.

This was after the senate approved the securitisation of an outstanding debit balance of N7.3 trillion ways and means in the first six months of the Bola Tinubu administration.

On March 11, 2024, Senate President Godswill Akpabio inaugurated a 17-member ad hoc committee of the red chamber to probe the “N30 trillion Ways and Means” secured under Buhari and report in “six weeks”.

The deadline is now past by nine weeks and the panel is yet to submit its report.

The panel asked the CBN to give a breakdown of the total overdraft to the federal government from 2015 to 2022, provide proofs of presidential approval, submit the list of all beneficiary MDAs/institutions/states or local governments and proofs of disbursement of funds to them, make available the terms and conditions, and forward all correspondences relating to the funds.

TheCable has contacted Jibrin, chairman of the committee, for an update on the probe but he is yet to respond.

At its inauguration, Akpabio charged the committee to be confidential and “keep investigations away from the prying eyes of journalists”.