“Ways and means” is a phrase whose inherent practice predates most current users. Its origin is firmly rooted in 17th century British Parliament. Contextually, it simply means “the provision of revenue to meet national expenditure requirements.” According to investopedia, a financial and investment blog, “Ways and Means, is the process by which the government sets out its economic policy through the presentation of a budget, and obtains parliamentary approval to raise the necessary revenues through taxation”.
In Nigeria, however, the phrase came into prominence during the borrowing days, that characterized the Buhari administration. Ways and means, within the Nigerian context, allows the federal government borrow or obtain loans from the apex bank— Central Bank of Nigeria, CBN. It is very much licit and lawful for the federal government, with the approval of the National Assembly, to borrow funds from the CBN through the Ways and Means, to address short-term demands, exigencies and emergencies. This obviously was why the apex bank, is considered as the lender of last resort.
It is instructive to note that, Nigeria’s debt profile had risen exponentially between 2015 and 2022 during president Buhari administration. BudgIT, alluded to this fact, when in their report, they stressed that, ” According to the Budget Office, between 2016 and 2022, the Buhari government raised total revenues of N26.67tn and expended N60.64tn, leaving a deficit of N33.97tn”. The report continued: “the gaping hole was financed with FG domestic debt, which rose from N8.84tn as of December 2015 to N44.91tn as of June 2023, while external debt rose from $7.35bn in December 2015 to $37.2bn in June 2023.
“This excludes support provided by the Central Bank amounting to N25tn. Ultimately, President Buhari moved Nigeria’s debt profile from N42tn to N77tn. This has had attendant effects on debt servicing, which rose from N1.06tn in 2015 to N5.24tn as of 2022. In fact, under President Buhari’s administration, the debt-service-to-revenue ratio grew from 29% to 96%.” The report concluded.
Despite such huge and unprecedented borrowings, infrastructural deficit has continued to soar while debt profile peaked during the dying days of the Buhari presidency. Bear in mind, there’s a sharp contrast between borrowing, via ways and means, and from the World Bank and other Bretton Woods institutions, as well as China loans. However, borrowing, via ways and means, ought to be precise, ephemeral and temporary. Because the CBN Act, is explicit on this. Section 38(1) stated that borrowing via this method should be done “in respect of temporary deficiency in budget revenue”.
Curiously, in May, 2023, few weeks to end the expiration of his second and final tenure, President Buhari wrote the National Assembly, requesting for the approval of a N22.7 trillion ways and means loans. In the same month, for some inexplicable reasons, the 9th Senate, under the leadership of Senator Ahmed Lawan approved the securitisation of the loans to the federal government as requested by former President. By implication, the interest rate accrued and approved, has pushed the loan to N30 trillion naira.
Implausibly, the speed at which the 9th senate approved the loan request brings to mind, how united those responsible for upholding moral vestiges and accountability in our society had turned against such basic character to loot our commonwealth and further edge the nation into a dangerous precipice. Come to think of it, N30 trillion! Such amount could build and equip a standard hospital and a college in each of the six geopolitical zones in the country. The speedy approval for such loans by the Ahmed Lawan-led Senate points to a deep rooted institutional decay in our political system.
The 9th Senate ought to have known, that President Buhari had not only surpassed the threshold for such loans, he in fact, had even violated the CBN Act. Because, section 38(2) of the CBN Act, is explicitly clear, when it says “the total amount of such advances & outstanding shall not at any time exceed five percent of the previous year’s actual revenue of the federal government”. Between 2017 and 2022, there was a clear breach of financial propriety by the Buhari administration. For instance, In 2022, the actual revenue was put at N6.49 trillion, while ways and means advances stood at 6.4 trillion, which represents about 138 percent of the revenue of 2021. Therefore, the government should not have requested for N22.7 trillion in 2023.
Sadly, the previous government was smart enough to push the burden to the average Nigerian. The securitisation of the N30 trillion ways and means loans, by the 9th Senate, as requested by Buhari, would incontrovertibly be converted into long-term bonds, which would be sold to investors. Such investors could be ordinary Nigerians. Therefore, in a way, we are shortchanged.
The 10th Senate, irked by these monumental fleecing, and despite having in their midst, some principal actors who contributed, aided and ensured smooth approval of the Buhari ways and means, had ordered for a probe. The President of the 10th Senate, Godswill Akpabio, had inaugurated a joint committee last February, to probe the entire process, but it was not without name-calling and blame game. Sen. Lawan weakly defended his actions thus, “What the 9th National Assembly approved or rectified in terms of ways and means was not N29 or N30 trillion. It was N22 trillion but there was N819 billion to address a very serious infrastructure dilapidation that we have across the country. So, it was not N30 trillion. It was N22 trillion and then, of course, the one we had made it almost N23 trillion. If we have a ways and means that is N30 trillion today, that means something happened between then and now and it is for the National Assembly to find out what happened” Sen. Lawan said.
The show of shame on the floor of the Senate alluded to the fact that, serious crisis of leadership in the country, would linger for a much longer time. Senators were openly trading blames and seeking to exonerate selves from the heist. In fact, ex Senate president, Ahmed Lawan, whose 9th Senate approved the now controversial ways and means want us to sweep the matter under the carpet, and move on. He reminded us that the country is passing through excruciating pains. The energy wasted on finding holes in Buhari’s ways and means, should be put to good use in addressing current challenges.
Those who, in good faith believe the current system is sustainable and central to our development as a nation must have a rethink. The stench oozing from the National Assembly, especially the Senate, is disheartening, to say the least. It has become an unrepentant chamber, where our commonwealth are shared amongst the political class. Just when the dust is yet to settle on the 30 trillion ways and means, a N3 trillion budget padding scandal is still rocking the upper chamber. The disclosure by suspended Senator Abdul Ningi, has opened a can of worms. It inadvertently led to an open confessions, denials and counter claims on which Senator got what, when and how. The sharing formula, by Senators had exposed what many have been saying in hush tones, as regards the National Assembly.
Recent call for the return to parliamentary system is to me timely. A more profound benefit of the system, could be having a part-time legislature, as against this bunch of worn- out politicians, feeding fat on the sweat of the masses. It seems, though at the moment implausible, given the fact the same senate would play an integral part in the transition to the parliamentary system, many could work against it.
For now, we have our radar fixated on the ongoing probe, of the N30 trillion ways and means, by the 10th senate. Will the committee work dispassionately, or will it be just another tea- sipping group of family and friends?
The securitisation of the ways and means, amounting to N30 trillion, implies that, rather than paying back to the CBN, the federal government simply pumps enormous money in capital markets, which the end result is an increased liquidity in the economy, thereby aggravating inflation. Whether we admit it or not, the CBN has been complicit in the worsened inflation in the country, especially the last 7 years.
The government of the day must not emasculate the CBN. It must be allowed space and time to see the full benefit of floating the Naira. On the political space however, the Senate committee probing the 30 trillion Ways and Means, must remember— Nigerians will be the final judge at the end of the day.
Abdullahi D Mohammed is with the Department of Political Science and International Studies, at the Ahmadu Bello University, Zaria.
