The plan to probe the N30 trillion loan granted to the federal government during the administration of former President Muhammadu Buhari through Ways and Means (W&M) by the Central Bank of Nigeria (CBN), is in order. The W&M is a loan facility through which the apex bank finances government’s budget shortfalls. The probe will also cover N1.09 trillion disbursed to farmers under the CBN’s Anchor Borrowers’ Programme (ABP) as part of its intervention in the agricultural sector. However, the CBN claimed that before Emefiele was removed from office, about 52 per cent of the ABP had been repaid.
Minister of Finance and Coordinating Minister for the Economy, Wale Edun, disclosed this at a conference in Abuja recently. Edun explained that the federal government was determined to know how the W&M advances were inherited by the present administration and how the immediate past government utilised the loan, and how such excessive borrowing could reduced or stopped.
The government has sent a bill to the National Assembly that will authorise the removal of “nuisance” taxes and levies from the nation’s tax system to prevent future debts arising from W&M. The bill also seeks the setting up of a committee that will ensure that all revenues due to government from the corporate sector are remitted to government treasury.
A fiscal policy and tax reform committee that will revolutionise the country’s tax system is said to be in place to complement the efforts to address the backlog of loans that were approved by the CBN to the last administration without due process. A day after the minister disclosed government’s readiness to probe the N23 trillion loan granted to the previous administration, the Senate President, Godswill Akpabio, announced that the Senate had resolved to probe how the W&M facility was obtained and spent by the Buhari government.
The Senate President also claimed that the “reckless spending” of the overdraft collected from the CBN under Emefiele accounted for the current food and security crises in the country. He also disclosed that an ad hoc committee had been set up for that purpose. He alleged that details of how the loans were spent were deliberately not made available to the National Assembly, including the N10 trillion spent on ABP. About $2.4 billion foreign exchange (FX) was spent out of the $7 billion allocated.
The probe is welcome. It has become necessary to set limits on such loans, in accordance with the CBN Act, 2007. A thorough audit will safeguard future mismanagement of loans obtained from the CBN, particularly through the W&M advances that seem to have been abused. However, the probe should be devoid of any witch-hunt or political vendetta against any individual or group. The probe should be transparent. We recall that the Buhari administration had in January 2023 requested from the National Assembly that the N22.7 trillion W&M loan be converted to a 40-year bond with a moratorium of three years. Buhari also requested the approval of the National Assembly to borrow additional N1 trillion to fund N818.5 trillion 2023 supplementary budget. The House of Representatives, on May 4, 2023, approved the conversion of the N22.7 trillion loan to a long-term bond of 40 years at a concessionary rate of 9 per cent per annum.
Though some members of the National Assembly opposed it on the ground that it was unconstitutional, and that details of the proposal were not provided, they were “ruled out of order”, and the loan was approved following the recommendation of the House Committee on Finance, Banking , Currency, Loans and Debt Management. It is uncertain how the probe will go. Nonetheless, we urge the federal government and the lawmakers to do more to reposition the battered economy and less on probes that may lead nowhere. Nigerians are becoming disillusioned with the state of the economy.
We call for elaborate plans to reduce the economic hardship and rising cost of living. It has become expedient for the government to review the removal of fuel subsidy and the floating of the naira and introduce measures that will address the present economic challenges. Let the probe be thorough and transparent. The outcome of the probe should also be made public.