PRP: Tinubu must tell Nigerians the truth on clearing N30trn ways and means advances

The Peoples Redemption Party (PRP) says President Bola Tinubu must come clean on repayment of N30 trillion in ways and means advances.

In his Independence Day speech, Tinubu said his administration has cleared over N30 trillion in ways and means loans.

In a statement on Monday, Muhammed Ishaq, PRP spokesperson, said the president’s claim of clearing the debt is “misleading”.

Ishaq asked the national assembly to investigate debt swap deals “shrouded in secrecy and mystery”.

The party asked the government to end the “deceptive terminology”, adding that transparency will ensure accountability and rebuild trust in the government.

“What we hear from certain relevant government agencies is that the debt is increasing, hence the bill sent to the National Assembly to increase the maximum threshold of FGN Debts from the Central Bank of Nigeria( CBN),” the statement reads.

“Indeed, reports indicate that instead of an outright clearance, this debt has simply been securitized What a deceit?

“What the government did in essence was to issue local currency denominated Promisory Notes, sold same to investors and use the proceeds from the sale to pay the debts owed to the CBN in the Ways and Means financing debacle which practically means that the nation is still owing till date.

“Furthermore and unfortunately, the Nation has not been provided with the details of these Notes: the tenure, rate, and investors, as well as the potential impact of the Notes on our economy.

“To say the least, the Notes issuance has been shrouded in secrecy and mystery. We wish to demand answers to the following questions: Who were the parties to the transaction?

“How much fee were they paid? How were they appointed? These and several other questions begged for explanations and the failure to give these explanations on the process of the Notes Issuance raises serious questions about the accountability and transparency of financial commitments made by the government.”

BACKGROUND

Ways and means is a loan facility through which the Central Bank of Nigeria (CBN) provides short-term financing to cover the federal government’s budget shortfalls.

On May 3, 2023, the senate approved the securitisation of the N22.7 trillion loan request made by former President Muhammadu Buhari.

In December of the same year, the national assembly approved Tinubu’s request for the securitisation of outstanding N7.3 trillion ways and means debt balance.

In the first quarter (Q1) of 2024, the country’s public debt increased to N121.67 trillion.

According to the Debt Management Office (DMO), the rise in Nigeria’s public debt stock is partly due to new borrowing, as well as ways and means securitisation.

Wale Edun, minister of finance, had also said the federal government is not relying on ways and means to fund external debt service or other liabilities.

Speaking on Independence Day, Tinubu said there has been a gradual reduction in the debt service ratio by about 29 percent.

“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,” the president said.

According to Tinubu, his administration has also been able to pay bills, clear the foreign exchange (FX) backlog of $7 billion his government inherited and raise Nigeria’s foreign reserves to $37 billion, despite inheriting over $33 billion foreign reserves 16 months ago.

He said the country is gradually leaving the fiscal imbalances such as huge debt-to-GDP ratio.