Court Adjourns Suit Filed On Nigerians’ Behalf Against DMO’s Bid To Securitize N23trn Ways And Means Loan

The Federal High Court sitting in Abuja, Friday, fixed December 4 for continuation of hearing on a motion on notice seeking an interlocutory injunction restraining the Debt Management Office (DMO) and other federal government agents from carrying on or taking any further steps on securitization of the Ways and Means loan of N22.7 trillion.

The suit also seeks to stop conversion of the debt to a promissory note or any other promise to pay at a future date or securitization by ways of issuance of treasury bills, bonds or other forms of security.

The suit was filed by Messrs Justin Edim and Akinfewa Akinwunmi through their lawyer, Opatala Victor, on behalf of themselves and Nigerians against the DMO.

Recall that in December 2022, the Federal Government requested the 9th National Assembly for permission to secure the debts they had incurred over the years.

The series of loans secured from the Central Bank of Nigeria (CBN) had amounted to N22.7 trillion, and the federal government planned restructuring these loans to something that can be traded.

The applicants argued in their application that the federal government has over the years secured various loans from the CBN under the Ways and Means provision of Section 38 of CBN Act in contravention of relevant laws which stipulated that the total amount the federal government can borrow shall not at any time exceed five per cent of the previous year’s revenue of the Federal Government.

The applicants averred that recently, the ways and means debt of ₦22.7 trillion was decided to be converted into bond (promissory note) contrary to section 38(3)(b) of the CBN ACT.

Victor urged the court to declare that the effect of securitizing the ways and means debt will adversely affect the plaintiff and millions of Nigerians as well as rob them of the true worth of their savings and further drive Nigerians below poverty line.

“That by securing the Ways and Means Debt, the Government will be putting too much money in the money market which naturally increases liquidity in the Nigerian economy which penultimately skyrocket inflation in Nigeria.

“That unless the respondents are compelled by an injunction of this honourable Court, it will continue to take steps in variance with the law and continue in its efforts to securitise the ways and means loan; which if completed and bought by Nigerians and investors might become irreversible,” Victor stated.

Lawyers in the case announced an appearance before Justice James Omotosho on Friday and the matter was further adjourned to December 4 for further hearing.