CFG Advisory Boss Calls For Emefiele’s Probe Over Alleged Violation Of CBN Act

The Central Bank of Nigeria’s Governor, Godwin Emefiele may be under fresh probe as The Chief Executive Officer at The CFG Advisory, Tilewa Adebajo, have called for questioning on his recklessness over the controversial ways and means used to fund the Federal Government in the last seven years.

The Nigerian government borrows money from the CBN through Ways and Means Advances to finance budget deficits.

THE WHISTLER had reported that the borrowings from the CBN are in contravention of the CBN Act which prescribes that the FG should liquidate its debt with the CBN before fresh borrowings.

As of June 2015 when President Muhammadu Buhari assumed power, ways and means stood at N648.26bn.

But the figure has ballooned to N22trn according to official data. This implies that Emefiele has funded the government with N21.35trn in the last seven years.

Adebajo while speaking on Arise Tv programme said, “Currently now the total debt profile for the country is $200bn. But because of the law, you can see that the Central Bank has started to use ways and means and it has reached N22trn which is an illegal finance.

“Take a look at the revenue profile of the government, the ways and means financing should not be more that N500bn to N1trn at the maximum now it has N22trn.

“So, you are going to ask the CBN governor (Emefiele) how he broke the Central Bank Act and put ways and means at N22trn. The DMO is the only authority that has powers vested in it to raise debt for the Federal Government of Nigeria. External debt borrowing is the only thing they go to the National Assembly to seek permission for.

“Internal borrowing like ways and means, the president cannot approve it. The laws already gives the powers to the Debt Management Office to issue those securities based upon its own understanding.”

Section 38 of the CBN Act, 2007 provides that “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.”

The Act also stipulates that “no repayment shall take the form of a promissory note or such other promise to pay at a future date or securitization by way of issuance of treasury bills, bonds, certificates or other forms of security which is required to be underwritten by the Bank.”

The Nigerian government is currently trapped in the dilemma of the N22trn ways and means and plans to securitize the debt for 40 years.

“On the way and means, the total ways and means today is N20trn and we have approval to securitize, securitization will be over a forty years period, with an interest rate of nine percent but over the years, we have been paying the interest component that is charged on it,” Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning had disclosed last year.

But Adebajo argued that it was illegal and in contravention of the CBN Act to securitize the ways and means.

He said, “You cannot go N22trn through ways and means debt then you want to take it off the CBN balance sheet. Throw it off to the DMO to securitize it. It doesn’t work that way.

“They want to send the securitisation proposal to the ways and means committee of the National Assembly, under which law? There is no law in Nigeria that states that you take ways and means financing to the National Assembly for approval.”