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Tinubu: We’ve Settled Over ₦30 Trillion in Ways and Means Debt

Published by Fakinlede Tope John on October 1st, 2024.

Tinubu: We’ve Settled Over ₦30 Trillion in Ways and Means Debt

President Bola Tinubu announced that the federal government has successfully cleared more than ₦30 trillion in ways and means advances during his address commemorating Nigeria’s 64th Independence Day.

Ways and means refer to a lending facility from the Central Bank of Nigeria (CBN) that provides short-term financing to address budget shortfalls for the federal government.

On May 3, 2023, the Senate approved a request for the securitization of ₦22.7 trillion in loans initiated by former President Muhammadu Buhari. Subsequently, in December, the National Assembly granted Tinubu’s request to secure the remaining ₦7.3 trillion in ways and means debt.

As of the first quarter of 2024, Nigeria’s public debt rose to ₦121.67 trillion, with the Debt Management Office (DMO) attributing this increase to new borrowings and the securitization of ways and means.

Finance Minister Wale Edun indicated that the government is not relying on ways and means for funding external debt obligations or other liabilities. During his speech, Tinubu highlighted a decrease in the debt service ratio from 97% to 68%, noting, “We have cleared the ways and means debt of over ₦30 trillion.”

He also reported that his administration has managed to settle bills, eliminate a $7 billion foreign exchange backlog inherited from the previous government, and raise Nigeria’s foreign reserves to $37 billion, despite starting with over $33 billion just 16 months ago.

Tinubu expressed optimism about moving away from fiscal imbalances, including the country’s significant debt-to-GDP ratio.

Economic Reforms Underway

The president emphasized that essential reforms are being implemented to enhance the economy sustainably. “If we do not address the fiscal misalignments that have caused the current economic challenges, we risk facing a future fraught with uncertainty and severe consequences,” he warned.

He reassured citizens that his administration is dedicated to fostering a free enterprise system, encouraging investment, and upholding effective regulatory processes. “This principle guides our divestment efforts in the upstream petroleum sector, aimed at positively transforming our industry,” he said, adding that this approach will enhance oil and gas production, thereby benefiting the economy.

Tinubu also noted that a more disciplined monetary policy by the Central Bank has contributed to stability and predictability in the foreign exchange market. He mentioned ongoing fiscal policy reforms, including the approval of economic stabilization bills that aim to create a more business-friendly environment, stimulate investment, and alleviate tax burdens for both businesses and workers once enacted.