March 17, (THEWILL)- About five months after it initiated an investigation into the multi-trillion naira repairs of the nation’s moribund refineries, the Senate on March 12, 2024 commenced another fact-finding process.
The upper legislative chamber inaugurated a panel to probe the N30 trillion ways and means advances under the immediate past President Muhammadu Buhari whose eight-year rule ended on May 29, 2023.
Ways and means is a loan facility through which the central bank finances the government’s budget shortfalls.
The Central Bank of Nigeria (CBN) Act 2007 stipulates that the apex bank may grant interim advances to the Federal Government in respect of temporary deficiency of budget revenue provided such overdraft do not surpass 5 per cent of the Government revenue from the previous year.
But this statutory provision was massively abused under Buhari leading to the humongous N30 trillion ways and means which the Bola Tinubu-led administration stressed that it contributed largely to the current economic and financial trouble choking the nation.
The probe committee was set up, following the adoption of a resolution of the Senate Joint Committees on Banking, Insurance and other Financial Institutions; Finance; National Planning; Agriculture; and Appropriation.
In his inaugural address, the Senate President urged the 17-man Committee, which had 12 weeks to submit its report, to be impartial, non-compromising and confidential in handling the affairs of the committee.
Akpabio said the 10th Senate believes in transparency, accountability and good governance, adding that the Committee should prove their commitments as Nigerians were agitating to know how the huge sums of money were utilised.
The flipside
However, finance and other industry experts who spoke to THEWILL on the latest Senate’s shop-list of probes described the exercise as a move on the lawmakers’ familiar path of business as usual. Some were miffed that many of the lawmakers in the 10th Assembly were part of the 9th Assembly that expressly approved former President Buhari’s several requests for the Ways and Means advances, without insisting on the details.
Among them is Senator Ahmed Lawan who was the Senate President at the time.
A petroleum engineer and chartered accountant, Bala Zaka, said the probe is an exercise in futility. In a telephone chat with THEWILL, Zaka who is also a chartered taxation practitioner, said the lawmakers know the degree of waste and corruption that reigned under Buhari.
“Those criticising the former President today were his praise-singers. When a leader leaves office, his praise-singers move to the next leader. Were they not aware of the rot that reigned during the Buhari-led administration, and how money was spent like water?” Zaka asked.
Another respondent, James Ikungbomire, said the lawmakers must be looking for something we do not know, or targeting an individual or group of persons to witch-hunt.
Mr Ikungbomire, an economist and entrepreneur, recalled that Nigeria lived practically on borrowing during Buhari as the economy was hemorrhaging from massive oil theft and stealing under the guise of oil subsidy payment.
He said, “Buhari government was a bazaar. Every sector was under siege by corrupt political leaders, civil servants and friends and relatives of the presidency. Have you forgotten the scam called ‘Nigeria Air’ and how it was launched by the same President who knew it was a scam? The money they stole and wasted is what led to the printing of money by the CBN to meet the extravagant spending of the government.”
In retrospect
Some of those who spoke to THEWILL recalled that the Nigerian National Petroleum Company Limited (NNPCL) remitted literally zero funds to the Federation Account in 2022 due to the payment of subsidy on Premium Motor Spirit, popularly called petrol, as once revealed by the Chief Financial Officer, Umar Ajiya.
The NNPCL is a major revenue generating agency in Nigeria, operating as the national oil company in charge of the management, sales, and other activities of the country’s crude oil and gas, among other key functions.
Ajiya, in a video released by the national oil company said fuel subsidy stopped the revenue generating firm from remitting taxes and royalties to the Federation Account, as well as halted the company from making profit.
Also, NNPCL, in the documentary, said, “The lingering constraint of fuel subsidy payment hampered its (NNPCL) growth potential, until a new administration emerged, bringing an end to the subsidy regime and saving the company from bankruptcy and setting it on a path of financial prosperity.”
They also recalled that the NNPCL disclosed that the nation lost $10 billion through oil theft, while the moribund refineries continue to gulp money.
“The government was still sharing revenue and paying salaries during these periods. Where do you think the money came from”, asked Ikungbomire. He recalled the disclosure by Gov. Godwin Obaseki of Edo state that the government was printing money to meet its statutory obligations.
Governor Obaseki had disclosed in April 2023 that Nigeria was in huge financial trouble and that the federal government printed N60 billion as part of federal allocation for March, which the government denied.
Senate as accomplice
THEWILL recalls that the 10th Senate had in December 2023 approved President Tinubi’s request for the securitisation of the outstanding debit balance of N7.3 trillion of the Ways and Means Advance in the Consolidated Revenue Fund (CRF) of the Federal Government.
The Senate President, Godswill Akpabio, announced the approval after majority of the lawmakers supported it through a voice vote during the plenary.
The securitisation is the process of pooling assets and repackaging them into interest-bearing securities.
The Buhari administration had relied heavily on the CBN to finance its expenditure programmes via Ways and Means, whose balance as of December 19, 2022, stood at N22.7 trillion.
To give Buhari a soft landing, the Senate on May 27, 2023, amended the CBN Act to raise the total advances the bank can make to the federal government from five per cent to 15 per cent.
“It is the same lawmakers that are now shouting. Can you imagine that level of hypocrisy?” Bala asked.
Comes applause
However, some economic and financial experts have commended the Senate for embarking on the probe.
The CEO, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, applauded the development stressing that it will help the government to identify the improvement opportunities and ensure such problems do not occur in the future.
Akpan Hogan Ekpo, Professor of Economics & Public Policy at University of Uyo, Akwa Ibom State, commended the Senate for the move to investigate the humongous Ways and Means spending to guide the new CBN leadership;.
“The probe is fine if properly done. It would serve as a deterrent to CBN Governors to obey and follow the rules. As banker to government the CBN can lend to government 5% of previous actual revenue repayable within a year. The present Gov by following the rules may help tame the rising inflation. Perhaps the probe may help rebuild the trust the Apex bank so badly needs. I hope the probe will be transparent,” Ekpo told THEWILL in a note.
Probe basket
The decision by the Senate to investigate the humongous Ways and Means spending under Buhari has added weight to concerns about the lawmakers’ indulgence in theatrical probes.
The Senate on October 24 constituted an ad-hoc committee to investigate all contracts estimated at over N11.35 trillion awarded for the rehabilitation of the four moribund refineries in the country. Nothing has been heard of the outcome of the probe after the one month deadline.
The Senate in May 2020 set up a seven-member ad-hoc committee to probe the “financial recklessness” of the Interim Management Committee (IMC) of the Niger Delta Development Commission (NDDC).
The committee was specifically asked to probe the IMC for allegedly squandering N40 billion in three months and look into the account for other financial transactions within this period.
The acting Managing Director of NNDC, Prof Daniel Pondei, who collapsed in the blare of the television camera while appearing at the Senate in August 2020, was rushed out of the venue of the investigative hearing.
The then Minister of Niger Delta Affairs, Senator Godswill Akpabio, now Senate President, however, stayed behind for the probe, which was eventually suspended after the incident.
Akpabio’s revelation that the lawmakers were part of the financial rot in NDDC stirred controversies that diverted attention from the purpose of the probe. The exercise died a natural death.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
