TAIWO AMODU examines some legislative decisions of the Ninth Assembly as the Tenth Assembly begins investigation into Buhari’s 22.7 trillion Ways and Mean Approval.
THE Tenth Senate recently walked its talks to investigate the Ways and Means and the Anchors Borrowers Programme under the immediate past administration of President Muhammadu Buhari when it inaugurated a 17-man adhoc Committee.
Before the inauguration of the team which has Senator Jibrin Isah as Chairman, the Red Chamber following the report of its Joint Committees on Banking, Insurance and other Financial Institutions; Finance; National Planning; Agriculture; and Appropriations which had earlier held an interactive session with the Federal Government’s Economic Management resolved to investigate the N22.7tn printed by the Central Bank of Nigeria through Ways and Means overdraft.
The Ways and Means provision allows the government to borrow from the Central Bank of Nigeria if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
Last May, the Ninth Senate under the leadership of Senator representing Yobe North, Ahmad Lawan, had approved the request by President Muhammadu Buhari to restructure the N22.7 trillion loans the apex bank extended to the federal government under its Ways and Means provision.
The Ninth Senate equally approved an additional N180.4 billion being the balance of the supplementary budget and the interest accrued on the Ways and Means advances.
Nigerian Tribune checks revealed that the Senate approved the loan, 26 days to the exit of the Buhari administration.
Following significant shortfall in its revenue projection, the Buhari administration had relied heavily on the apex bank to finance its expenditure programmes via Ways and Means.
Further investigation revealed that the Buhari administration had in 2022, asked the Senate to approve his proposal to securitize the loan, a request that was rebuffed by the Senate citing lack of details.
But in a subtle threat, Buhari had warned that failure to grant the securitization approval would cost the government about N1.8tn in additional interest in 2023.
Leading the debate for the approval last May, Majority Leader of the Senate, Ibrahim Gobir, disclosed that part of the loan was given to states.
Explaining that the Senate conducted due diligence before approval, Leader of the Ninth Senate revealed that a Special Committee was set up by the Red Chamber to scrutinize the fiscal document and put up the report after critical analysis and review of submissions made by the Federal Ministry of Finance, Budget, and National Planning and the CBN.
Senator Gobir further disclosed that the panel discovered that the Ways and Means balance was initially N19.33tn as of June 30, 2022, but later grew to N22.72tn as of December 19, 2022, as a result of financial obligations to ongoing capital projects and additional expenditures which includes domestic debt service gaps and interest rate.
Senator Gobir, on the floor of the Senate at the emergency session where the Ways and Means draft was approved, few weeks to the end of the Buhari administration listed the critical sectors in need of urgent funds aside some states governors’ request.
Part of the Ways and Means money was given to state governments as loans to augment budgetary shortfall in their various States.
“Most of the requests for funds for an increase in Ways and Means were made to Mr President on the need to finance the budget due to revenue shortfall. Such requests were either made by the Hon. Minister of Finance, Budget and National Planning or the Central Bank Governor.
“The Federal Government as a result of revenue shortfalls occasioned by the COVID-19 pandemic and low oil prices, relied heavily on the Ways and Means to finance its budget deficit to keep the country working for the people.”
“The monies received by the Federal Government were used for funding critical projects across the country;
“That due to the serious shortfall in Government Revenue, the Federal Government for the economy not to collapse, was compelled to borrow repeatedly from the CBN, exceeding the 5 per cent threshold of the prior year’s revenue as stipulated by the CBN Act, 2007.
“That the Federal Government through the Ministry of Finance, Budget, and National Planning has concluded plans to convert the CBN loans to tradeable securities such as treasury bills and bond issuance.”
Isah’s Committee decries lack of details
The observation by the Chairman of the Senate adhoc Committee, Jibrin Isah, however contradicted the assurance given by Senator Gobir and the leadership of the Ninth Senate before the loans advances were granted.
Speaking on the Ways and Means advances at the inaugural meeting of the adhoc team, Senator Isah expressed disappointment that the CBN Act was observed in breach by its immediate past Governor, Godwin Emefiele, whom he noted unilaterally approved loans without recourse to the statutory approving authority, the Committee of Governors.
“Under the Ways and Means, the Committee of Governors should have been the approving authority. But the CBN Governor did not do that; he unilaterally approved.
“We also want to know the total figure of the ways and means because what we have here doesn’t add up. We want to know who got what.”
NASS sudden amendment of the CBN Act
Findings revealed that both chambers of Ninth National Assembly on the eve of Buhari’s departure, held emergency sessions to amend the CBN Act.
The Senate Leader, Senator Gobir while leading the debate on the CBN Amendment Act, “A Bill for an Act to Amend the Central Bank of Nigeria Act C4 Laws of the Federation of Nigeria 2004 and for Other Matters Connected Thereto, 2023 (SB. 1125)” said it was to amend the Central Bank of Nigeria (CBN) Act regarding the Ways and Means Advances policy.
The amendment which was passed, increased the total CBN advances to Federal Government from five percent (5%) to a Maximum of fifteen percent (15%).
Gobir said, “The very essence of this Bill is to enable the Federal Government to meet its immediate and future obligation in the approval of the Ways and Means by the National Assembly and advances to the Federal Government by the Central Bank of Nigeria…”
The CBN Act allows the CBN to grant temporary advances to the federal government in respect of temporary deficit of budget revenue at such rate as the bank may determine.
It however says the total amount of such advances outstanding “shall not at any time exceed five (5) percent of the previous year’s actual revenue of the Federal Government.”
In addition, it stipulates that, “All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted.
If such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid.
Specifically, Section 38 of the CBN Act states: “Notwithstanding the provisions of the section 34(d) of this Act, the Bank (CBN) may grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue at such rate as the Bank may determine.
“The total amount of such advances outstanding shall not at any time exceed five (5) percent of the previous year’s actual revenue of the Federal Government.”
Tinubu’s Minister groans
Apart from the Tenth Senate under Godswill Akpabio, the Presidency has equally blamed the economic hardship being experienced by Nigerians on the abuse of Ways and Means by the Buhari administration.
Speaking at a recent session with the Senate Committee on Finance, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, attributed the present hype inflation in the country to reckless printing of money without productivity under the Buhari administration.
He said:” We talked about inflation, and you have helped to solve that. Where has it come from?
“It came from the eight years of just printing money not matched by productivity. It’s not like when you earn dollars and you free the naira alongside it, although there’s even a better way than that. But that’s still not as bad.
“It is not as if the money is matched by productivity increase in output, it is not; and what happened was that for eight years, the weak were left to their own devices. It is the privileged few that took everything.”
Honourable Edun equally told the lawmakers that the apex bank in deference to fiscal discipline would distance itself from Ways and Means.
“I am pleased to note the Fiscal Authorities efforts in discontinuing Ways and Means advances. This is also in compliance with Section (38) of the CBN Act (2007), the Bank is no longer at liberty to grant further Ways and Means advances to the Federal Government until the outstanding balance as of December 31, 2023, is fully settled.
“The bank must strictly adhere to the law limiting advances under ways and means to five percent of the previous year’s revenue.
“We have also halted quasi-fiscal measures of over N10tn by the Central Bank of Nigeria under the guise of development finance interventions which hitherto contributed to flooding excess Naira and raising prices to the levels of Inflation we are grappling with today.”
Lawan, others play Pontius Pilate?
Sunday Tribune checks revealed that some of the actors in the Ninth Senate which overlooked apparent breaches of the CBN Act are now in the Tenth Senate.
Senator representing Borno South and Chief Whip of the Senate, Ali Ndume, while speaking on the floor of the Senate recalled that in the Ninth Senate he demanded that the Red Chamber under Ahmad Lawan ask President Buhari for details of the spending before approval but his submission was rebuffed.
“When the N22.7 trillion Ways and Means approval request was brought before the ninth senate, I insisted that details of the spending made with it should be provided before approval but the senate then went ahead and approved it.”
Checks also revealed that Rivers Senators, Betty Apiafi and George Sekibo equally expressed strong reservations about Buhari’s request for CBN loan without details.
Senator Apiafi raised a Point of Order and said the president’s request was not constitutional.
Also speaking and citing relevant laws from the Constitution, the CBN Act and the Senate Standing Rules, George Sekibo, argued that the request was not in line with the Constitution.
‘’It will be a disservice that we have spent that money on behalf of Nigerians. It will be an abuse of our personal sense and against our privileges if we approve this request without details of the expenditure.”
They were however ruled out of Order by then Senate President, Ahmad Lawan, who insisted that Ways and Means was in line with global practice.
Senator Lawan had maintained that the Senate had to pass the Ways and Means Advances so that the federal parliament would be able to consider and pass the 2022 Supplementary Budget still pending before the two chambers.
Lawan said, “I don’t see any National Assembly standing against any infrastructure development like the building of roads and bridges among others. It is therefore very important that before the executive incurred this kind of huge Ways and Means Advances, should, as a matter of must, seek the approval of the National Assembly. Wherefor, whatever reason, an emergency happened, it should not take them this kind of period before a request is sent to the National Assembly for approval.
“We have to pass these Ways and Means Advances because we don’t want the government to be shut down. The supplementary budget 2022, is on hold at the moment because we could not pass the Ways and Means request. However, with the passage of the Ways and Means Advances today, the Supplementary budget 2022, which essentially is to rehabilitate damaged roads and bridges across the country, will be fixed.”
The adhoc team set up by Akpabio includes, the incumbent Deputy Senate President, Barau Jibrin who was Chairman of the Senate Committee on Appropriation, Ninth Senate; the Senator representing Ogun West and Chairman Senate Committee on Finance in the Ninth Senate, Olamilekan Adeola. Incidentally, Senator Adeola is the incumbent chairman of the Senate Committee on Appropriation in the tenth assembly.
ALSO READ: Man arrested for cutting transformer cable in Lagos