L-R. Tilewa Adebajo, with FrontFoot Executives Sully Abu, Chido Nwakanma, and Emeka Izeze.2. Also,
Financial expert and public intellectual Mr Tilewa Adebajo has again spoken of the adverse consequences to the economy of the securitisation of Nigeria’s Ways and Means advances.
He noted that such an act by the Senate validates the conversion of Nigeria’s huge Ways and Means indebtedness to further loans as bonds and other securities. “Securitisation means the government now issues treasury bills and bonds to pay off the Ways and Means”.
Securitisation of the Central Bank’s ways and means advances was a feature of the Muhammadu Buhari administration. The Senate approved President Buhari’s request, sources say, without including it in the order paper. It was intended to restructure N22.7trn loans which the Federal Government took from the CBN under the ‘Ways and Means Provision.’ Securitisation increased Nigeria’s Debt to GDP ratio to 38.4% in the public debt balance.
Adebajo stated: “Ways and Means was never supposed to exceed N1 trillion, yet now it has surpassed N30 trillion, which is against section 38 of the Central Bank of Nigeria Act. Under Section 38 of the CBN Act, the government is granted the authority to borrow from the apex bank, but such overdraft should not surpass five per cent of the government’s revenue from the previous year.” It should also be repaid by the end of the financial year the loan was obtained.
Adebajo observed at the Audit Reporting Training of FrontFoot Media Initiative held on 25-26 October 2023, at the GulfView Hotel, Ikeja, that such an action has compounded Nigeria’s indebtedness.
“Ways and Means financing is now 30 times more than is legally allowed. Securitization of Ways and Means is an illegal act. Nigeria’s deficit is increasing annually. Now ninety-five (95%) per cent of Nigeria’s revenue goes for debt service.”
Adebajo noted that while regular citizens cannot do much to stop the spendthrift direction of the Federal and State governments, the media and professional groups should be more active in calling out any misbehavior and wrong direction. “Unfortunately, the citizen is too busy struggling with survival,” he noted.
“The key responsibility falls on the media and the elite. The elite have compromised. The media are not pulling their weight.”
Even so, he asked citizens to pay closer attention to the country’s financial management.
Adebajo advised, “Anytime you have a budget, ask for the audited accounts for the same year. What did you say you were going to do? What did you do? What revenue target did you project? What was the actual revenue? What was the expenditure projection? What was actually spent and on what?”
Emeka Izeze, director and partner, said the Audit Reporting Training: X-Raying State Government Audit Reports is a flagship capacity development programme of FrontFoot Media Initiative.
“It is a targeted training of journalists which we are undertaking under the auspices of the Wole Soyinka Center for Investigative Journalism and the sponsorship of the MacArthur Foundation,” Izeze affirmed.
The Lagos workshop, FrontFoot Media Initiative stated, is the fourth in its series to train the media to pay closer attention to government audit reports and advance transparency and accountability in governance. Earlier workshops were in Benin, Awka, and Abuja, FCT.
26 October 2023