Financial expert, Tilewa Adebanjo knocks Senate for secret and illegal approval of ‘Ways and Means

Emmanuel Ukudolo I Friday, Oct.27, 2023

 

IKEJA, Lagos- Financial expert Tilewa Adebajo has criticized the Senate for secretly approving President Bola Ahmed Tinubu’s request to securitize Nigeria’s Ways and Means advances, which essentially converts these advances into bonds and other securities.

He pointed out that this move contradicts Section 38 of the Central Bank of Nigeria Act, which restricts the Central Bank’s overdraft to no more than five percent of the government’s previous year’s revenue.

Specifically, section 38 of the CBN Act provides as follows: “Not withstanding the provisions of section 34(d), of this Act, the Bank may grand temporary advances to the Federal Government in respect of temporary deficiency of government revenue at such rate of interest as the Bank may deem fit.

“(2)The total amount of such advances outstanding shall not at any time exceed 5 percent of the pervious year’s actual revenue of the Federal Government.

“(3) All advances made pursuant to this section shall be repaid –

“(3a)  as soon as possible and shall in any event be repayable by the end of the Federal Government  Financial Year in which they are granted and if such advances remain unpaid at the end of the year, the power of the Bank to grand such further advances in any subsequent year shall not be execrable , unless the outstanding advances have been repaid; and

“(3b)in such form as the Bank may determine provided that no repayment shall take the form of promissory note or such other promise to pay in the future date or securitasation by way of issuance of treasury bills, bonds, certificates or other forms of security which is required to be underwritten by the Bank.”

Adebajo expressed concern that this action would increase Nigeria’s debt burden significantly, as Ways and Means advances have grown to over N30 trillion, well beyond the legally allowed limit of N1 trillion.

Adebajo also highlighted that the Senate’s approval was done secretly, without being listed in the Senate Order Paper.

He emphasized that the securitization of Ways and Means advances is illegal and contributes to the growing deficit in Nigeria’s finances, with 95% of revenue going toward servicing debt.

Adebajo called on the media and professional groups to be more proactive in holding the government accountable for its financial decisions, as many ordinary citizens are preoccupied with their daily struggles.

He urged citizens to scrutinize Nigeria’s financial management by requesting audited accounts to compare budget projections with actual revenue and expenditures.

Furthermore, Emeka Izeze, a director and partner, noted that the Audit Reporting Training, which focuses on State Government Audit Reports, is a vital capacity development program organized by the FrontFoot Media Initiative with support from the Wole Soyinka Center for Investigative Journalism and the MacArthur Foundation.

The Lagos workshop was the fourth in a series of training sessions aimed at encouraging media scrutiny of audit reports, following previous workshops in Benin, Awka, and Abuja.