The unnecessary hullabaloo on CBN’s ways and means advances

BY MUSA ILALLAH

There has been an uproar in some quarters over the decision of the national assembly to approve the securitisation of Nigeria’s ‘ways and means’ (W&M) loans to the federal government, currently estimated at N7 trillion, ₦22.7 trillion or N30 trillion, in an arrangement that placed the loans on a tenor of 40 years with a moratorium on principal repayment of three years and an interest rate of 9% per annum.

“Ways and means” is how a government incurs debt by borrowing funds from the country’s central bank in order to address budget shortfalls.

It must be noted that the adoption of ‘ways and means’ by the PMB administration had become a soft landing and an inevitable step towards addressing a number of financial challenges it faced at the onset of the administration in 2015.

It is on record that Buhari’s administration from 2015 to 2023, faced significant fiscal challenges, including falling oil prices and reduced oil revenues among others.

The Sunday PUNCH newspaper of September 29, this year quoted an aide of former President Buhari setting the records straight of the disparity in the amonunt of ‘ways and means’ the PMB administration took from the CBN.

In the words of PMB’s aide, the claim by current governor of the Central Bank of Nigeria, Yemi Cardoso, on the current economic hardship in the country on the poor handling of the nation’s economy between 2015 and 2023 by Buhari is far from the truth.

The aide said the money supplied by the CBN during the review period was actually N7.5tn, far less than the N35tn CBN Governor Cardoso stated and the N30 trillion the NASS put forward.

The aide confirmed that the aggregate total of the ‘Ways and Means’ advances on the Consolidated Revenue Fund was N7.5 trillion in the eight years Buhari served as president of the country.

“I have read the story and my thinking is that Nigerians will just be laughing at them. The real position of things is that from the beginning, when the then acting Governor of the Central Bank of Nigeria (was in office), that issue arose from that moment,” he stated.

“The CBN was called by the National Assembly, what were their numbers? And the numbers for Buhari were not more than N7.5 trillion for all the eight years”, the aide added.

“The Cable, a credible online newspaper did a report challenging the National Assembly that they had promised to release a report. They (NASS) said they were going to release a report. The last time we heard that, they said they would release it in September. There are numbers, as given authoritatively by the central bank.”

The aide backed his argument with a letter as the response of the CBN to a request by the Senate on the matter at the time.

The letter, dated January 16, 2023, and titled, ‘Re: The Senate Special Committee on Ways and Means,’ was addressed to the office of the Senate Majority Leader.

It will recalled that the senate had inaugurated a 17 man ad-hoc committee chaired by Senator Isa Jubril to probe the administration of former President Muhammadu Buhari over the N30 trillion ‘Ways and Means’ Advances from the Central Bank of Nigeria.

Inaugurating the committee in February this year in Abuja, the President of the Senate, Godswill Akpabio, noted that unraveling the mystery behind the advances remains key in understanding the country’s present economic predicament.

Despite the fact that the President of the Senate, Godswill Akpabio had charged the committee to ‘leave no stone unturned in pursuit of the truth about the Ways and Means loans and the CBN report on the situation, the committee is yet to submit its report and the “truth” be made public.

In his response, the chairman of the 17-member committee, Senator Isa Jubril assured the senate that the probe would be carried out with precision to a logical conclusion.

Minister of finance and coordinating minister of the economy, Wale Edun, at a public wealth management conference in Abuja recently explained that the details of ways and means would be released soon. That assurance was in February this year.

Inspite of the conflicting figures in government’s ways and means advances, the senate and the house of representatives recently passed a bill to increase the percentage of ways and means loans the Central Bank of Nigeria can give to the federal government.

It raised the credit facility obtainable by the federal government from the apex bank from 5% to 10% of the revenue of a fiscal year.

Worried by the conflicting figures in the country’s ways and means, fnancial experts and civil rights activists have called on the Central Bank of Nigeria and the federal ministry of finance to release the exact figures which the apex bank advanced to the federal government during the administration of former president Muhammadu Buhari to end the controversy surrounding them.

Different figures have emerged regarding the ways and means advances the CBN offered to President Muhammadu Buhari’s administration. Since last year, the government and the NASS have quoted various statistics, ranging from N7 trillion to N22 trillion to N26.7 trillion to N30 trillion, a situation linked to corruption and a lack of due process and coordination among the various government agencies.

The experts said it is important for the CBN and the ministry of finance, which have been charged with releasing the actual ways and means figure, to come out clear and clean on the matter.

A professor of law and developmental economics, Tayo Bello, told The Leadership newspaper that the primary source of information must be the CBN. He said, “They are the ones who released the fund. They gave the money to the government, and whatever they say should be the figure we should rely on.”

The government can provide an accurate figure through the central bank and the ministry of finance. If they don’t have proper documentation or a proper record of figures, it will affect how they tackle inflation and macroeconomic stability.

Commenting also on the matter, Nigerian civil rights activist and the executive director of the Civil Society Legislative Advocacy Centre, Auwal Musa Rafsanjani, noted that the divergent figures provided by the government agencies show that more coordination is needed.”

According to him, part of the reason for the disparity in financial figures “is the lack of accurate and credible data sources that can be relied on. So, everyone comes with their data. There is no information sharing or coordination.

He castigated the PBAT administration for being unable to provide adequate and reliable data for its citizens particularly on its ways and means advances to the federal government.

However, several government agencies released divergent figures following President Bola Ahmed Tinubu’s assumption of office and Godwin Emefiele’s exit from the CBN leadership.

Certainly, the APC-led PBAT administration needs to do more in terms of the management of data for the records and posterity.

Musa Ilallah can be contacted via [email protected]

Views expressed by contributors are strictly personal and not of TheCable.