The Institute of Chartered Accountants of Nigeria has expressed its approval of the Senate's decision to investigate the Ways and Means loan to the Federal Government during the tenure of former president, Muhammadu Buhari.
In February, the Senate formed a nine-member ad hoc committee to investigate the allocation and utilization of the N30tn Ways and Means loan acquired by the Buhari administration from the Central Bank of Nigeria.
Talking to reporters recently, the ICAN President, Dr. Innocent Okwuosa, welcomed the inquiry by the upper legislative chamber and called on the CBN Governor, Yemi Cardoso to learn from the errors of previous CBN bosses.
The ICAN President stated, “Our expectation is that with the new administration, borrowing will be a thing of the past. However, I will advise CBN should continue to extend Ways and Means to the government but the CBN itself has stated that it will not continue to extend Ways and Means to the government. In fact, this is a good policy from our perspective. So, if CBN should stick to not increasing the Ways and Means that it gives to the government, that’s a policy that we support.
“I think it is a Fiscal Responsibility Committee that placed a limit on what Ways and Means percentage would be. It’s something around five per cent. When CBN exceeded this, people kept quiet. They should have spoken up so that CBN does not continue to exceed this limit. Now, it is not five per cent, we are talking about N30tn, that’s huge. I understand it’s been converted into bond. But one good thing we support is the fact that the Senate has instituted an inquiry into those Ways and Means. I would guess that the investigation would lead to more revelation and would be a lesson which the present CBN would learn from and would not go into the mistake of the previous CBN.”
Okwuosa urged the CBN to seek alternative means to support government deficit financing and discontinue increasing Ways and Means to the government.
He said, “They could go to the capital market and tie them to projects because each time you have a government deficit, it must be as a result of not having funds to back a project. So, if we want to raise funds for such a project, we (can) do that in the capital market and tie it specifically to the project that we couldn’t provide funding for in the budget. I think that’s the way CBN should go.”
Okwuosa also said that Nigeria would earn more forex if the nation promoted exports to African countries and took advantage of Africa’s free continental trade agreement.
“If we can also promote trade in Africa, assuming we cannot export to Europe, since we have an Africa Continental Trade Agreement that has come into place. It can be utilised, but we need to utilise it more. I think a combination of all these will increase foreign exchange for us and we begin to see the impact on the exchange rate,” he added.
