Victor Opatola, an attorney, addresses ISMAEEL UTHMAN regarding President Tinubu’s assertion that his administration has cleared the N30 trillion CBN loan. Earlier this year, Opatola represented some Nigerians in a Federal High Court case seeking to prevent the Federal Government from securitising the amount of the N22.7 trillion Ways and Means loan.

In plain language, how would you describe “ways and means” such that the typical Nigerian could grasp it?

A clause known as “ways and means” can be found in Section 38 of the Central Bank of Nigeria Act. According to the legislation, the CBN may provide the Federal Government with short-term advances at interest in order to make up for a brief shortfall in budgetary revenue. It is an advance, a sum of money that the CBN has lent to the federal government. But this specific loan needs to be paid back to the CBN within the borrowed fiscal year. It functions similarly to an overdraft that you take out of the bank and promptly repay as soon as your account is replenished.

The lack of a National Assembly monitoring regulation is what distinguishes ways and means. The absence of regulation by the National Assembly permits the Federal Government to apply for a loan from the CBN without authorisation. One of the arguments made against ways and means has been this. It is possible that neither the National Assembly nor the general public are aware of the exact date or reason for the money’s receipt. It’s constantly veiled in mystery.

Typically, ways and means should account for 5% of the government’s income from the year prior. However, over time, governments have borrowed money from the CBN and failed to pay it back within that fiscal year. Trillions of naira were borrowed by the government from the CBN under former President Muhammadu Buhari, and the debt continued to grow from President Jonathan’s administration to the current one. The Federal Government devised a strategy to securitise the debt when it was unable to repay this amount. At that point, we filed a lawsuit to halt the move, but the judge dismissed our case.

What is meant by securitisation?

The Federal Government owes the CBN money related to ways and means. The debt of Nigeria and the debt of the Federal Government are not the same. While the Federal Government’s debt is private and must be paid by itself, Nigeria’s debt is public. The debt of the Federal Government cannot be highlighted or calculated with Nigeria’s debt included.

Securitisation involves adding the Federal Government’s debt, which may be repaid over an extended period of time, to Nigeria’s debt by transforming the loan into a private bond. Securitisation is the process of shifting federal government debt to Nigerian or public debt. Nigeria’s debt, which was N500 million before the securitisation of ways and means, will now be N500 million more because the debt of the Federal Government has been increased. It will then appear on paper that the Federal Government is no longer in debt to the CBN, allowing it to begin borrowing as if it had never before broken any laws pertaining to ways and means.

The Federal Government has been breaking ways and means prior to securitisation. It was borrowing more than the required percentage and failing to repay it within the allotted period, which resulted in accumulation. However, the Federal Government is now indebted to Nigeria and Nigerians rather than the CBN on paper as a result of its retirement and public transfer of the debt. The debt has only been moved to Nigeria; it has not been settled.

How do you respond to President Bola Tinubu’s statement that his administration has cleared N30 trillion ways and means, considering your explanation?

The administration of President Tinubu has merely securitised the debt, transferring the burden from the Federal Government to Nigeria. Through securitisation, the entire nation will be accountable for the loan repayment rather than just the borrower.

The President’s declaration that the ways and means debt has been cleared is a technical phrase choice intended to give the impression that a debt has been paid off, even if it still remains. The nation will still have to pay the N30 trillion later. It’s all part of a scheme to deceive Nigerians into thinking their government is doing more than it really is. All the President is doing is giving the wrong idea.

How much do you believe Nigeria’s inflation and exchange rate stability are influenced by the manner and means financing?

During Buhari’s presidency, ways and means were a significant funding source. Nevertheless, the CBN could not have given trillions of naira from its reserves because it does not have its own currency. It is implied that additional money was printed. We know from basic economics that inflation can result from printing and putting too much money into circulation. Through various tactics, the money generated during Buhari’s administration is partially to blame for the current inflation the nation is facing. Money was moving around a lot, but it wasn’t being spent effectively.

What do you think about the National Assembly’s deeds and omissions in relation to Nigeria’s mounting indebtedness, both international and domestic?

You can see that the National Assembly has frequently functioned as a rubber stamp if you consider how simple it is to get loans and how different governments have acquired and used resources. The National Assembly is a willing participant in the escalating debt crisis, as seen by its unwillingness to examine the government’s use of ways and means.

The country’s mounting debt has not been sufficiently addressed by the legislature. All the President has to do to borrow money is ask the National Assembly, and they will approve it without conducting a thorough investigation. This hasn’t been beneficial. Our debt load continues to rise, and we seldom ever use these loans for anything useful. The National Assembly doesn’t seem to mind what the President proposes as long as it is adequately funded. They are failing in their responsibility to closely examine and verify the executive’s acts as they have continuously served as the executive’s rubber stamp.

What risks does Nigeria face as a result of its current debt load, and do you think it can be sustained over time?

There will come a time when people will be taxed for loan repayment, with each bank account taxed a specific amount to settle the debt, if we are careless with how we take out loans and keep accruing debt. It will get to the point where there is a real chance that we could default. We should learn from various countries that are defaulting on their debt services, and they have to undergo restructuring or face strict circumstances. Our loan application process is concerning. The loans have onerous terms and conditions. We are getting closer to a precipice, and all of these things are risky.

Investors will come freely if you can intimidate people with the police or military.