President Bola Tinubu has requested Senate approval to convert the remaining balance of ways and means of revenue in Nigeria’s Consolidated Revenue Fund (CRF) into federal assets, disregarding the advice of his special investigator, Jim Obazee. Obazee had recommended reassessing the balance, claiming it was acquired dubiously and illegally. However, Tinubu has emphasized the legality of the move in a letter addressed to Senate President Godswill Akpabio and read during a Senate plenary session on Saturday.
Tinubu drew attention to Section 38 of the CBN Act 2007, which permits the Central Bank to grant temporary advances to the federal government to address temporary revenue shortfalls in the budget. He noted that such advances should not exceed five per cent of the government’s revenue from the previous year. According to Tinubu, the CRF account of the Federal Government of Nigeria (FGN) stood at N7.3 trillion as of December 2023, primarily allocated to domestic debt servicing, including principal and interest.
The President argued that the securitisation of the ways and means advances is essential for reducing debt service costs. He highlighted the benefits of this approach, including a lowered interest rate of nine per cent compared to the previous three per cent, which would result in significant savings and contribute to reducing the budget deficit. Tinubu stressed that the securitised ways and means advances would enhance debt transparency by being included in public debt statistics.
In light of these considerations, Tinubu urged the Senate to approve the securitisation of the outstanding debit balance of N7.3 trillion as of December 2023.
Source: Peoples Gazette