• Thursday, July 18, 2024
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BusinessDay

Budget Funding: Why Tinubu’s administration is not relying on Ways and Means – Edun

FG unveils central revenue system to boost accountability

…Says Tinubu inherited N22.7 T in Ways and Means

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the current prudent management of the federal government income has helped to stabilize the economy, this leading to less reliance on borrowing to fund government activities.

The Minister who stated this while fielding questions from State House Journalists after the meeting of the Federal Executive Council FEC, presided over by President Bola Tinubu, also revealed that Nigeria’s total debt stock has fallen by 15%

Edun revealed that the Tinubu’s administration inherited N22.7 trillion in outstanding ways and means when they took over in May, 2023, which the administration is still investigating

He however put the current total outstanding ways and means at N3.4 trillion

” 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. 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.

” We are focused on ensuring that the revenue that is due to the federal government is collected robustly, using technology avoiding 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 amines, which have been securitized on the eve of the entry of President Tinubu’s administration.

” Naturally, we are auditing, we’re 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, from 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 that means deficit is N3.4 trillion.

He noted that the government is collecting the operating surpluses of revenue generating agencies by law under the Fiscal Responsibility Act and other legal guidelines.

” When we look at how much is outstanding, and how much is owed, we are actually very positive.

” We do not rely on ways and means to pay salaries, we don’t rely on it to pay external debt servicing or other obligations.

“That is the situation, the finances of Nigeria have been revamped.

” When we interrogate the figures over the first quarter of this year, starting end of December to the end of March, on the positive side, 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.”

“Why do I say this? The debt stock, the total debt stock of Nigeria in US dollar terms fell by 15%. That is very positive, any rating agency, any creditor, any investor looking at that will see it as a positive move.

” As a country that has petro-dollars, we have the ability to earn in dollars. So it’s highly relevant, that we look at what our exposure in dollar terms is.
He noted however stated that there been an increase of 25% or N8 trillion in debt stock, a situation he attributed to the movements in the exchange rates.

” Even though there was an 8 trillion or 25% increase in actual debt issuance, the total debt stock, including domestic debts, there was increase in issuance when you count the total external debt and domestic debt in Naira terms, which has led to the increase by 25%.

” That’s mainly due to the foreign exchange movement, which can change tomorrow, as we know. Linked to that is the all-important question of the government’s capacity to pay.

” It is all about the revenue and of course, to use those funds properly, judiciously, accountably and in a way that gives positive returns.”