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Obi Raises Concerns Over FG’s N7.3 Trillion Ways & Means Securitization

The former presidential candidate of the Labour Party (LP),Peter Obi,has expressed apprehensions regarding the approved N7.3 trillion Ways and Means debt balance.

 This debt, a short-term financing tool by the Central Bank of Nigeria (CBN) to cover budget shortfalls, is now under scrutiny.

President Bola Tinubu, on December 30, 2023, addressed both chambers of the national assembly, urging the securitization of the outstanding N7.3 trillion ways and means debt balance. 

Tinubu argued that this move would lead to benefits such as a reduction in debt service costs.

In response to this, Obi, in a thread on X, criticised the securitization as “illegal.” 

He drew attention to the previous administration’s similar borrowing of N22.7 trillion ways and means from the CBN, just before the end of its eight-year tenure.

Obi highlighted the violation of the CBN Act, stating that CBN lending to the government had surged 2700% in seven years.

 He emphasised the lack of transparency and accountability in the approval of the new securitization, expressing concern about the future economic repercussions.

According to Obi, the continuous securitization of CBN loans goes against the law, as the CBN Act limits the federal government’s borrowing to 5 percent of the previous year’s revenue. 

He pointed out that the law requires the liquidation of outstanding borrowing before any new advancement can be made.

Obi cautioned against the danger of accumulating “illegal borrowings” into Nigeria’s debt stock without transparent utilisation or accountability. 

He questioned the purpose of the N7.3 trillion borrowing and emphasized the need for detailed explanations.

The former Anambra governor decried the lack of transparency in government borrowings, describing it as a “disturbing pattern of huge borrowing and profligate spending.” 

Obi expressed concern about nonessential procurements being labelled as ‘capital’ expenditure, warning that such trends are unsustainable and could wreck the economy.

Obi called for a shift from political grandstanding to addressing fundamental issues of rational economic management. 

He criticised the current administration for burdening the populace with unsustainable levels of debt and urged a more compassionate approach to economic policies.

 

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