Wale Edun: FG not relying on Ways and Means to fund external debt service

Wale Edun, minister of finance, says the federal government is not relying on Ways and Means to fund external debt service or other liabilities.

Edun spoke on Tuesday while briefing state house correspondents on his presentation at the federal executive council (FEC) meeting presided over by President Bola Tinubu.

“I can say quite categorically that under President Bola Tinubu, the federal government does not rely on ways and means in order to fund itself,” Edun said.

“At no time have we gone to Mr. President and requested permission to seek funding from Central Bank to pay anybody, be it external debt service, be it share capital cash calls, or any other of the liabilities that the government has.

“As we have all agencies, we are focused on ensuring that the revenue that is due to the federal government is collected robustly, using technology to avoid the blockages, which manual processing can cause and it has led to a very robust revenue effort and likewise, we are implementing expenditure controls, also very ably empowered by technology.

“So within that context, what we have is that we had legacy, Mr. President inherited a legacy of N22.7 trillion in outstanding ways and means, which have been securitised on the eve of the entry of President Tinubu’s administration.”

The minister acknowledged the inherited legacy of N22.7 trillion in outstanding Ways and Means which were securitised just before Tinubu’s administration began.

‘TOTAL DEBT STOCK IN DOLLAR TERMS FELL BY 15 PERCENT’

Edun said Nigeria’s total debt stock in dollar terms decreased by 15 percent, describing this as a very positive development that would be favourably received by rating agencies, creditors, and investors.

He, however, said that due to exchange rate movements, the total debt stock in naira terms increased by 25 percent, despite an N8 trillion increase in actual debt issuance.

“When we interrogate the figures over the first quarter of this year, starting end of December and end of March, if we want to be positive, all we will say is that the glass is half full, we are halfway there. If not, we can be negative and try and say the glass is half empty,” the minister said.

“Why do I say this? The debt stock, the total debt stock of Nigeria in US dollar terms fell by 15 percent. That is very positive, any rating agency, any creditor, any investor looking at that will see it as a positive move.

“We are a country that has petro-dollars. We have ability to earn in dollars. So it’s highly relevant, that we look at what is our exposure in dollar terms.

“On the other hand, given the exchange rate movements, even though there was like an 8 trillion increase in actual debt issuance, the total debt stock, when you count the total external debt and domestic debt in naira terms, it has increased by 25 percent.

“That is mainly due to the foreign exchange movement, which can change tomorrow, as we know.”

The minister said a forensic audit is being conducted to scrutinise this figure as it represents a liability on which interest must be paid.

Edun said the government collects operating surpluses from revenue-generating agencies in accordance with legal guidelines, and the amount owed to the government surpasses the N3.4 trillion in Ways and Means.

“Naturally, we are auditing, we are doing a forensic audit and interrogating that figure, because it’s a liability which we have to pay interest on, so any deficits that you might see, to the ways and means, to the consolidated revenue account, maybe automatic debits on a figure that is still being interrogated, but as a matter of fact, the current Ways and Means deficit is N3.4 trillion,” he said.

“As I said, we collect the operating surpluses of revenue-generating agencies by law under the Fiscal Responsibility Act and other legal guidelines and when we look at how much is outstanding, and how much is owed, we are actually we are actually positive.”

Edun said the salaries, external debt servicing, and other obligations are not paid through Ways and Means, adding that Nigeria’s finances have been revamped.