The presidential candidate of the Labour Party (LP) in the 2023 election Mr Peter Obi has asked the Federal Government to list what it used the new debt of N7.3 trillion to do.

It would be recalled that the Nation­al Assembly on Saturday, December 30, 2023, approved 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.

Ways and means is a loan facili­ty through which the Central Bank of Nigeria (CBN) finances the gov­ernment’s budget shortfalls.

The securitisation is the pro­cess of pooling assets and repack­aging them into interest-bearing securities.

In a statement on Monday with the title, ‘Debt and Waste as Eco­nomic Policy’, Obi said, “Can the Federal Government, which holds the trust of the people, tell us what they used N7.3 trillion to do?

“We have always been told that all borrowings are for ‘capital’ projects, can we know the capital or productive projects this huge borrowing is being applied to?”

He said barely 26 days to the end of its eight-year tenure, the Buhari administration got the Senate to approve a N22.7 trillion Ways and Means borrowing from the CBN, noting that in seven years, CBN lending to the Buhari government had climbed 2700% in flagrant violation of the CBN Act.

Obi noted that “indifferent to the illegality of the excessive ways and means borrowing, the National Assembly still approved the new Tinubu administration’s request for an N7.3 trillion securi­tisation of the existing ways and means facility just before consid­ering the 2024 budget proposals.

According to him, “On the 30th of December 2023, the last working day of the year 2023, shockingly the president re­quested the National Assembly to approve the securitisation of N7.3 trillion being the outstand­ing debt owed to the Central Bank of Nigeria (CBN) by the Federal Government of Nigeria.

“Almost at the same time as the illegal securitisation was ap­proved by parliament, the pres­ident also sought and secured National Assembly approval to borrow another $7.8 billion and €100 million. No questions asked. No explanations were sought as to the precise purpose of these borrowings all within the seven-month tenure of this government.

“Ordinarily, minimum pub­lic accountability should require that the president and his ad­ministration offer more specific explanations about the purpose of these borrowings. But so far, all we have been told is that these borrowings are meant to fund ‘capital’ expenditure.

“Specifically, the contin­uous securitisation of ways and means borrowing from the CBN is against the law and against the CBN Act which stipulates the limit of the Fed­eral Government’s borrowing from the CBN not to exceed 5% of the previous year’s rev­enue. The law also requires the liquidation of the outstanding borrowing before any new ad­vancement can be made.

“More importantly, the CBN Act expressly states that all bor­rowings under the ways and means cannot be converted to debt or securitised if the CBN is the underwriter.

“It needs to be pointed out that the idea of securitisation of illegal borrowings from the CBN and transferring the same into our debt stock portends danger to the future of our economy. It increases the debt burden of the nation. It is even more worrisome because these accumulations of debts are not being transparent­ly and productively utilised or accounted for”.

The former Anambra gover­nor noted that what is emerging is a disturbing pattern of huge bor­rowing and profligate spending on nonessential procurements which are being termed ‘capital’ expenditure and are being funded with an accumulation of debts.

“For instance, a good number of these so-called ‘capital’ expen­diture items as contained in the 2024 budget are more procure­ment and luxury projects.

“This trend of lavish spending backed only by equally lavish borrowing is unsustainable and would wreck the economy in due course. It needs to be halted.

“Unless this trend is halted, the nation runs the greater risk of running into more turbulent economic waters in the near fu­ture”, he said.

He noted that “this is the time when we need to go beyond poli­tics and partisan grandstanding to address the fundamental issues of rational economic manage­ment.

“I am afraid that the current administration is not paying sufficient attention to issues of rational economic management. Instead, an unsustainable level of debt is being piled upon the econ­omy thereby further burdening our already distressed populace who are bearing the burden of harsh economic policies not backed by compassionate cush­ioning policies.”