Economic and investment analyst Tilewa Adebajo has asserted that Nigeria’s Ways and Means facility should not exceed N1.5 trillion.
In contrast to President Bola Ahmed Tinubu’s statement that his administration has cleared the N30 trillion Ways and Means debt inherited from the previous government, Adebajo contends that the debt remains on the books of the Central Bank of Nigeria (CBN).
In his Independence Day address, President Tinubu claimed that his administration had settled the N30 trillion debt and managed to reduce the debt service ratio from 97% to 68%, while maintaining Nigeria’s foreign reserves at $37 billion.
Speaking on News Central’s show, Breakfast Central, Adebajo said, “Section 38 of the CBN Act looks at ways and means as a very, very punitive form of financing. It is not the sort of financing that you’re supposed to go to. It’s not your go-to source of financing.
“It’s a financing of last resort. First of all, the criteria is such that the money you can borrow must be based on your previous year’s revenue. “So it’s a percentage of that previous year’s revenue. So even with the increase with the National Assembly, the ways and means should not be more than 1.5 to at least 1.5 trillion.
“That is what the law allows. But it’s currently at 30 trillion. So you can see that that is indeed a gross violation of the ways and means financing.”
Tilewa Adebajo highlighted that the Ways and Means facility was securitised and submitted to the Nigerian Senate for approval. He emphasised that the National Assembly lacks the authority to securitise the Ways and Means for repayment to the Central Bank of Nigeria (CBN).
Adebajo stressed the need for legislative reforms to address the Ways and Means issue, as the CBN faces challenges in reflecting this financing on its balance sheets without breaching Section 38 of its own act.
The debate around Ways and Means, debt, and revenue has been a contentious issue in Nigeria, particularly since the transition between the administrations of Muhammadu Buhari and Bola Ahmed Tinubu. The specifics surrounding the figures and application of the Ways and Means advances have stirred controversy.
Under Buhari’s tenure, the Ways and Means debt surged from N856 billion to N23.7 trillion, according to official records. However, a report by the Joint Senate Committee on Banking, Insurance and Other Financial Institutions, Finance, National Planning, Agriculture, and Appropriation raised questions about the accuracy of these figures. The report indicated that N30 trillion borrowed by the Buhari administration from the CBN could not be fully accounted for, casting doubt over the true extent and utilisation of the Ways and Means facility.