President Bola Tinubu says the federal government has cleared over N30 trillion in ways and means advances.
Tinubu spoke on Tuesday while addressing the nation to commemorate the country’s 64th Independence Day.
Ways and means is a loan facility through which the Central Bank of Nigeria (CBN) provides short-term financing to cover the federal government’s budget shortfalls.
On May 3, 2023, the senate approved the securitisation of the N22.7 trillion loan request made by former President Muhammadu Buhari.
In December of the same year, the national assembly approved President Bola Tinubu’s request for the securitisation of outstanding N7.3 trillion ways and means debt balance.
In the first quarter (Q1) of 2024, the country’s public debt increased to N121.67 trillion.
According to the Debt Management Office (DMO), the rise in Nigeria’s public debt stock is partly due to new borrowing, as well as ways and means securitisation.
Wale Edun, minister of finance, had also said the federal government is not relying on ways and means to fund external debt service or other liabilities.
Also, while giving his speech, Tinubu said there has been a gradual reduction in the debt service ratio by about 29 percent.
“We have cleared the ways and means debt of over N30 trillion. We have reduced the debt service ratio from 97 per cent to 68 per cent,” the president said.
According to Tinubu, his administration has also been able to pay bills, clear the foreign exchange (FX) backlog of $7 billion his government inherited and raise Nigeria’s foreign reserves to $37 billion, despite inheriting over $33 billion foreign reserves 16 months ago.
He said the country is gradually leaving the fiscal imbalances such as huge debt-to-GDP ratio.
‘ECONOMY UNDERGOING NECESSARY REFORMS’
Tinubu said the economy is undergoing the necessary reforms and retooling to serve the country better and more sustainably.
“If we do not correct the fiscal misalignments that led to the current economic downturn, our country will face an uncertain future and the peril of unimaginable consequences,” the president said.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes.
“This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively.
“The move will create vibrancy and increase oil and gas production, positively impacting our economy.
“The more disciplined approach adopted by the Central Bank to monetary policy management has ensured stability and predictability in our foreign exchange market.”
He said the country is moving ahead with fiscal policy reforms such as the approval of the economic stabilisation bills.
Tinubu said the economic stabilisation bills will make Nigeria’s business environment more friendly, stimulate investment and reduce the tax burden on businesses and workers once they are passed into law.
