Wale Edun, minister of finance, says the federal government is not relying on Ways and Means to fund external debt service or other liabilities.
Edun spoke on Tuesday while briefing state house
correspondents on his presentation at the federal executive council (FEC)
meeting presided over by President Bola Tinubu.
“I can say quite categorically that under President Bola
Tinubu, the federal government does not rely on ways and means in order to fund
itself,” Edun said.
“At no time have we gone to Mr. President and requested
permission to seek funding from Central Bank to pay anybody, be it external
debt service, be it share capital cash calls, or any other of the liabilities
that the government has.
“As we have all
agencies, we are focused on ensuring that the revenue that is due to the
federal government is collected robustly, using technology to avoid the
blockages, which manual processing can cause and it has led to a very robust
revenue effort and likewise, we are implementing expenditure controls, also
very ably empowered by technology.
“So within that context, what we have is that we had legacy,
Mr. President inherited a legacy of N22.7 trillion in outstanding ways and
means, which have been securitised on the eve of the entry of President
Tinubu’s administration.”
The minister acknowledged the inherited legacy of N22.7
trillion in outstanding Ways and Means which were securitised just before
Tinubu’s administration began.
‘TOTAL DEBT STOCK IN DOLLAR TERMS FELL BY 15
PERCENT’
Edun said Nigeria’s total debt stock in dollar terms
decreased by 15 percent, describing this as a very positive development that
would be favourably received by rating agencies, creditors, and investors.
He, however, said that due to exchange rate movements, the
total debt stock in naira terms increased by 25 percent, despite an N8 trillion
increase in actual debt issuance.
“When we interrogate the figures over the first quarter of
this year, starting end of December and end of March, if we want to be
positive, all we will say is that the glass is half full, we are halfway there.
If not, we can be negative and try and say the glass is half empty,” the
minister said.
“Why do I say this?
The debt stock, the total debt stock of Nigeria in US dollar terms fell by 15
percent. That is very positive, any rating agency, any creditor, any investor
looking at that will see it as a positive move.
“We are a country that has petro-dollars. We have ability to
earn in dollars. So it’s highly relevant, that we look at what is our exposure
in dollar terms.
“On the other hand, given the exchange rate movements, even
though there was like an 8 trillion increase in actual debt issuance, the total
debt stock, when you count the total external debt and domestic debt in naira
terms, it has increased by 25 percent.
“That is mainly due to the foreign exchange movement, which
can change tomorrow, as we know.”
The minister said a forensic audit is being conducted to
scrutinise this figure as it represents a liability on which interest must be
paid.
Edun said the government collects operating surpluses from
revenue-generating agencies in accordance with legal guidelines, and the amount
owed to the government surpasses the N3.4 trillion in Ways and Means.
“Naturally, we are
auditing, we are doing a forensic audit and interrogating that figure, because
it’s a liability which we have to pay interest on, so any deficits that you
might see, to the ways and means, to the consolidated revenue account, maybe
automatic debits on a figure that is still being interrogated, but as a matter
of fact, the current Ways and Means deficit is N3.4 trillion,” he said.
“As I said, we collect the operating surpluses of
revenue-generating agencies by law under the Fiscal Responsibility Act and
other legal guidelines and when we look at how much is outstanding, and how
much is owed, we are actually we are actually positive.”
Edun said the salaries, external debt servicing, and other
obligations are not paid through Ways and Means, adding that Nigeria’s finances
have been revamped.
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