In a scathing critique on Monday, former Anambra State Governor and 2023 Labour Party Presidential Candidate, Peter Obi, lambasted President Bola Tinubu for what he termed the illegal securitization of the N7.3 trillion ‘ways and means’ facility from the Central Bank of Nigeria (CBN).
Obi highlighted that just 26 days before the conclusion of its eight-year tenure, the Buhari administration secured Senate approval for a staggering N22.7 trillion ways and means borrowing from the CBN.
Expressing concern, Obi emphasized that in a span of seven years, CBN lending to the Buhari government skyrocketed by 2700 percent, blatantly violating the CBN Act.
Undeterred by the questionable legality of the extensive ways and means borrowing, Obi pointed out that the National Assembly greenlit Tinubu’s administration’s request for a N7.3 trillion securitization of the existing facility, right before deliberating on the 2024 budget proposals.
Adding to the surprise, Obi revealed that on December 30, 2023, the final working day of that year, Tinubu approached the National Assembly, seeking approval for the securitization of the outstanding N7.3 trillion debt owed to the CBN. Concurrently, Obi claimed that the president secured National Assembly approval to borrow an additional $7.8 billion and €100 million.
He said, “No questions asked. No explanations were sought as to the precise purpose of these borrowings all within the seven-month tenure of this government.
“Ordinarily, minimum public accountability should require that the president and his administration offer more specific explanations about the purpose of these borrowings. But so far, all we have been told is that these borrowings are meant to fund ‘capital’ expenditure.
“Specifically, the continuous securitisation of ways and means borrowing from the CBN is against the law and against the CBN act which stipulates the limit of the federal government’s borrowing from the CBN not to exceed 5 per cent of the previous year’s revenue. The law also requires the liquidation of the outstanding borrowing before any new advancement can be made,” he stated.
The businessman cum politician said the CBN Act expressly states that all borrowings under ways and means cannot be converted to debt or securitised if the CBN is the underwriter.
He pointed out that the idea of securitisation of illegal borrowings from the CBN and transferring the same into Nigeria’s debt stock portends danger to the future of the Nigerian economy and increases the debt burden of the nation.
“ It is even more worrisome because these accumulations of debts are not being transparently and productively utilised or accounted for.
“While this new debt of N7.3 trillion has been hurriedly approved without scrutiny by the National Assembly, the immediate public accountability question is: can the federal government, which holds the trust of the people, tell us what they used the N7.3 trillion to do?
“We have always been told that all borrowings are for ‘capital’ projects, can we know the capital or productive projects this huge borrowing is being applied to? “ he queried.
Obi explained that what is emerging is a disturbing pattern of huge borrowing and profligate spending on nonessential procurements which are being termed ‘capital’ expenditure and are being funded with an accumulation of debts.
“ For instance, a good number of these so-called ‘capital’ expenditure items as contained in the 2024 budget are more procurement and luxury projects. This trend of lavish spending backed only by equally lavish borrowing is unsustainable and would wreck the economy in due course. It needs to be halted.
“Unless this trend is halted, the nation runs the greater risk of running into more turbulent economic waters in the near future. This is to add my concerned voice to those of many other troubled Nigerians,” Obi added.
The former governor advised that it was time to go beyond politics and partisan grandstanding to address the fundamental issues of what he described as rational economic management.
“I am afraid that the current administration is not paying sufficient attention to issues of rational economic management.
“Instead, an unsustainable level of debt is being piled upon the economy thereby further burdening our already distressed populace who are bearing the burden of harsh economic policies not backed by compassionate cushioning policies,” he stressed.