President Bola Tinubu has urged the Senate to approve the conversion of the remaining balance of ways and means revenue in Nigeria’s Consolidated Revenue Fund (CRF) into federal assets. Despite objections from his special investigator, Jim Obazee, who raised concerns about the dubious and illegal incurrence of the balance, Tinubu proceeded with the request.
In a letter addressed to Senate President Godswill Akpabio and read during a Saturday plenary session, Tinubu cited Section 38 of the CBN Act 2007, emphasizing the Central Bank’s authority to grant temporary advances to the federal government to address temporary deficiencies in budget revenue. According to Tinubu, the CRF account stood at N7.3 trillion as of December 2023, attributed to domestic debt servicing, including principal and interest.
Tinubu highlighted the government’s consideration of various measures to prevent the use of ways and means advances for domestic debt servicing. He argued that securitizing the ways and means would reduce debt service costs. The president outlined the benefits of this move, including a reduction in debt service costs due to a lowered interest rate of nine percent compared to the previous three percent.
Tinubu asserted that the savings from the reduced interest rate would help alleviate the budget deficit and enhance debt transparency, as securitized ways and means advances would be included in public debt statistics. Urging the Senate to consider and approve the securitization of the outstanding debit balance, Tinubu justified the move as a strategic step to improve financial management.
The president’s request comes despite the reservations expressed by his special investigator, who recommended reassessing the balance before seeking Senate authorization. The outcome of this proposal could have significant implications for Nigeria’s fiscal policies and transparency in managing its consolidated revenue.