Tinubu said his administration has cleared the ways and means debt of over N30 trillion.
“We have cleared the ways and means debt of over N30 trillion,” the president said.
VERIFICATION
Ways and means advances refer to a facility provided by the CBN that allows the federal government to borrow money from the apex bank to cover short-term funding needs.
Essentially, it helps the government manage its finances when there is a shortfall in revenue.
On May 23, 2023, the senate approved the securitisation of N22.7 trillion ways and means loans, following a request by former President Muhammadu Buhari on December 28, 2022, to convert the debt into a government bond.
Securitisation is the process of turning assets into interest-bearing securities that can be sold to investors.
Also, on December 30, 2023, the national assembly approved Tinubu’s request for the securitisation of outstanding N7.3 trillion ways and means debt.
While the Debt Management Office (DMO) has not released the document for the securitisation of the N7.3 trillion loan, the details of the N22.7 trillion loan securitised during Buhari’s administration showed that the tenure is 40 years, meaning that the principal and interests are expected to be paid within 40 years.
Additionally, there is a 3-year moratorium on the principal, which means for the first three years, the borrower does not have to make any payments towards the principal amount of the loan.
The document also states that it carries an interest rate of 9 percent per annum, which means that each year, the federal government will pay 9 percent of the remaining loan balance as interest.
VERDICT
Tinubu’s claim that his administration has cleared the N30 trillion ways and means is false, as the DMO document showed that the loan has been securitised to be paid within 40 years, not paid in full as Tinubu asserted.