Peter Obi Criticizes Tinubu and NASS for Alleged Illegal Securitization of N7.3tn CBN Debt

BY Milcah Tanimu

Peter Obi, the Presidential Candidate of the Labour Party (LP) in the 2023 general elections, has condemned President Bola Tinubu for the purported securitization of the N7.3 trillion ‘ways and means’ facility from the Central Bank of Nigeria (CBN). Obi deemed this action illegal and expressed concern over the National Assembly’s approval of the request without proper scrutiny.

Obi highlighted that the continuous securitization of ways and means borrowing from the CBN violates the law and the CBN Act, which sets a limit for the federal government’s borrowing from the CBN not to exceed 5 percent of the previous year’s revenue.

Securitization involves converting a debt into an asset, typically in the form of bonds offered to investors. Obi criticized the securitization of the loan as a means for the CBN to recoup its money by selling the loan as bonds to investors.

Drawing attention to past instances, Obi mentioned that, shortly before the end of its eight-year tenure, the Buhari administration secured Senate approval for a N22.7 trillion ways and means borrowing from the CBN. He lamented a 2700 percent increase in CBN lending to the Buhari government over seven years, in violation of the CBN Act.

Obi expressed dismay that the National Assembly approved Tinubu’s administration’s request for a N7.3 trillion securitization of the existing ways and means facility, showing indifference to the alleged illegality. He noted that, simultaneously, Tinubu sought approval to borrow $7.8 billion and €100 million without detailed explanations.

The former governor emphasized that securitization of illegal borrowings from the CBN, when the CBN is the underwriter, goes against the CBN Act. He warned that this practice poses a danger to Nigeria’s economic future and increases the nation’s debt burden.

Obi questioned the lack of transparency in utilizing the borrowed funds, urging the federal government to provide specific details on how the N7.3 trillion was utilized for ‘capital’ projects. He expressed concern about a pattern of extravagant spending on nonessential procurements, terming them as ‘capital’ expenditure, and warned of the potential economic consequences if this trend continues.

In conclusion, Obi called for a halt to the pattern of lavish borrowing and spending, emphasizing the need for rational economic management to prevent adverse effects on the Nigerian economy. He urged the current administration to address fundamental issues beyond political considerations and partisan grandstanding.