Tinubu, CBN, DMO, Others Sued over Bid to Securitise N23tn Ways and Means Loan

Alex Enumah in Abuja

President Bola Tinubu, the Central Bank of Nigeria (CBN), the Debt Management Office (DMO) and four others have been dragged before a Federal High Court in Abuja, over bid to securitise the sum of N22.7 trillion Ways and Means loan support the federal government got from the apex bank.

Besides, Justice James Omotosho of the Federal High Court on Friday, adjourned to December 4, for hearing in a motion seeking for an interlocutory injunction restraining the DMO from carrying on or taking any further steps on securitising the said loan.
Justice Omotosho adjourned hearing in the motion on notice and other related motions, following request by the plaintiffs’ lawyer, Mr. Victor Opatola, to put his house in order.

Others in the suit marked: FHC/ABJ/CS/1286/2023, are the federal government of Nigeria, the Ministry of Finance, National Assembly and the Attorney General of the Federation and Minister of Justice.
The plaintiffs, Justin Edim and Akinfewa Akinwunmi, who initiated the legal action on behalf of themselves and other Nigerian citizens, specifically asked the court to stop the conversion of the debt to a promissory note or any other promise to pay at a future date or securitisation by ways of issuance of treasury bills, bonds or other forms of security.

In December 2022, the federal government had requested the 9th National Assembly for permission to securitise the debts they had incurred from the CBN over the years.
Plaintiffs claimed that the series of loans secured from the CBN had amounted to N23.7 trillion, and that the federal government was planning to restructure the loans to something that could be traded.

Plaintiffs further stated that the federal government had over the years secured various loans from the CBN under the Ways and Means provision of Section 38 of the CBN Act in contravention of relevant laws which stipulated that the total amount the federal government could borrow shall not at any time exceed five per cent of the previous year’s revenue of the federal government.

They averred that recently, the Ways and Means debt of N22.7 trillion was decided to be converted into bond (promissory note) contrary to Section 38(3)(b) of the CBN Act.

Plaintiffs accordingly want the court to declare that the effect of securitising the Ways and Means debt would adversely affect the plaintiffs and millions of Nigerians, as well as rob them of the true worth of their savings and further drive Nigerians below poverty line.
“That by securing the Ways and Means Debt, the government will be putting too much money in the money market which naturally increases liquidity in the Nigerian economy which pen-ultimately skyrocket inflation in Nigeria.

“That unless the respondents are compelled by an injunction of this honourable Court, it will continue to take steps in variance with the law and continue in its efforts to securitise the Ways and Means loan; which if completed and bought by Nigerians and investors might become irreversible,” Opatola stated.
However, following a hint from the court, Opatola, requested for a short adjournment to enable him make necessary adjustment in his court documents.
The request was not opposed by other parties in court and Justice Omotosho subsequently adjourned till December 4, for hearing in the motion on notice as well as the main suit.