FG To Audit N22.7trn Ways And Means Debt To CBN

The federal government on Tuesday unveiled plans to audit the N22.7trn Ways and Means debt to the Central Bank of Nigeria.

The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, disclosed this at the opening of the Public Wealth Management Conference today in Abuja.

The conference which was declared open by Vice President Kashim Shettima has in attendance the Minister of Finance Wale Edun, the Chairman of the MOFI Board Dr Shamsudeen Usman, a former Finance Minister Dr Olusegun Aganga, Chairman of Heirs Holdings Tony Elumelu and other top officials in the public and private sectors of the economy.

Ways and Means is the expression for money borrowed by the federal government from the Central Bank of Nigeria (CBN).

Section 38 of the CBN Act 2007 provides for Ways and Means, which is a facility that allows the CBN to fund the government’s short-term financing needs. It, however, must not exceed five per centt of previous years’ actual revenue.

But the immediate past government led by Muhammadu Buhari exceeded the five per cent prudential benchmark and pushed for the securitisation of the N22.7trn ways and means.

The DMO securitised the N22.7trn for 40 years tenor with moratorium on principal to be paid in three years at 9 per cent interest rate per annum.

The minister said the decision to audit the federal government debt to the CBN was to ensure that the federal government was not made to pay for funds it did not spend.

The finance minister said that the administration was working hard to make the Nigerian business space more attractive to investors by eliminating all unnecessary taxes.

Edun also said all government-owned enterprises (GOEs) would be made to up their game in revenue generation.

He said, “We have to stem liquidity. The Central Bank has led the way in pointing out that the ways and means have to be tailed down and eliminated, and that is what we agree with.

“We are doing in that direction, there was an inherited amount of N22.7trn in backlogs. We are auditing it, and it is like when I am ready to pay a loan from a bank, and I ask for an audit before finding the agreed sum to pay.

“But apart from that, how do you get your ways and means down? We have to get revenues up and expenditure reduced as much as possible.”

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has said that the apex bank will no longer give Ways and Means to the President until the previous loans are repaid.