Ways and means advances by the Central Bank of Nigeria (CBN) to the administration of President Muhammadu Buhari amounted to N7.5 trillion as at December 2022, according to official documents seen by TheCable.

This is significantly lower than the N30 trillion reported by the senate joint committee on banking, finance, national planning, agriculture and appropriation which led to the setting up of a probe panel headed by Isah Jibrin (Kogi east).

Ways and means is a loan facility through which the CBN finances the federal government’s budget shortfalls.

The CBN law limits advances under ways and means to 5 percent of the previous year’s revenue, but this has been observed mostly in the breach over the years.

This way of financing government deficits usually results in macroeconomic instability, leading to inflation and high exchange rates because of the excess liquidity injected into the economy.

THE BREAKDOWN

Documents seen by TheCable show that as at December 19, 2022, the total outstanding overdraft to the federal government in its “treasury subtreasury account” at the CBN was N22,719,703,774,306.90.

This was made up of N7,531,819,048,929.66 as ways and means, N13,725,408,432,557.50 as total costs of transactions on federal government securities in the capital market, and N4,618,829,652,047.41 as interest charges on the overdraft facility.

The loans were not reflected as part of the debt stock of the federal government until December 2022 when the Buhari administration officially requested the national assembly to do so.

TheCable understands that there were only three requests for ways and means by Buhari throughout his tenure, even though the facility was disbursed more than thrice — some automated because of the sovereign risk on securities.

The biggest amount — nearly N2 trillion — was disbursed in 2020 during the COVID-19 outbreak when government revenues fell as a result of the lockdown. The federal government got loans from the CBN for intervention programmes during the pandemic.

The next biggest amount was in 2022 when N1,473,618,756,185.62 was advanced to the federal government. It was the same year Russia invaded Ukraine, leading to a spike in food prices globally.

In 2019 — the year Buhari was elected for a second term in office — N1.4 trillion was provided to the federal government via ways and means.

One of the biggest beneficiaries of the overdraft was the Nigeria Bulk Electricity Trading (NBET), which got N1.3 trillion under the “payment assurance facility” to keep the Nigerian electricity supply industry (NESI) “liquid”.

Two private power generation companies — Azura Power West Africa and Accugas Limited — got steady payments from the federal government under the controversial “take or pay” arrangement.

Azura gets $30 million monthly while Accugas receives $10 million, also monthly.

Nigeria’s credit rating is at risk if there is a failure to meet up with the payment obligations to Azura and Accugas in two of the most curious cases of sovereign guarantee hanging on the nation’s neck.

The Niger Delta Power Holding Company (NDPHC) also got huge funds from the overdraft.

SENATE PROBE IN LIMBO

Olayemi Cardoso, who succeeded Emefiele as CBN governor, said in February 2024, that the bank would no longer grant ways and means advances to the government “until all outstanding debts are refunded”.

This was after the senate approved the securitisation of an outstanding debit balance of N7.3 trillion ways and means in the first six months of the Bola Tinubu administration.

On March 11, 2024, Senate President Godswill Akpabio inaugurated a 17-member ad hoc committee of the red chamber to probe the “N30 trillion Ways and Means” secured under Buhari and report in “six weeks”.

The deadline is now past by nine weeks and the panel is yet to submit its report.

TheCable has contacted Jibrin for an update on the probe but he is yet to respond.

At its inauguration, Akpabio charged the committee to be confidential and “keep investigations away from the prying eyes of journalists”.

… laments as Regulator (NMDPRA) continues to grant licences to import banned dirty diesel, jet fuel 

Vice President, Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, has accused International Oil Companies (IOCs) in Nigeria of doing everything to frustrate the survival of Dangote Oil Refinery and Petrochemicals. Edwin said the IOCs are deliberately and wilfully frustrating the refinery’s efforts to buy local crude by jerking up high premium price above the market price, thereby forcing it to import crude from countries as far as United States, with its attendant high costs.

Speaking to a group of Energy Editors at a one-day training programme, organised by the Dangote Group, Edwin also lamented the activity of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in granting licences, indiscriminately to marketers to import dirty refined products into the country. He said, “the Federal Government issued 25 licences to build refinery and we are the only one that delivered on promise. In effect, we deserve every support from the Government. It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 per cent of our production, have been exported. We are calling on the Federal Government and regulators to give us the necessary support in order to create jobs and prosperity for the nation.”

According to him: “While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are trying their best to allocate the crude for us, the IOCs are deliberately and willfully frustrating our efforts to buy the local crude. It would be recalled that the NUPRC, recently met with crude oil producers as well as refineries owners in Nigeria, in a bid to ensure full adherence to Domestic Crude Oil Supply Obligations (DCSO), as enunciated under section 109(2) of the Petroleum Industry Act (PIA). It seems that the IOCs’ objective is to ensure that our Petroleum Refinery fails. It is either they are deliberately asking for ridiculous/humongous premium or, they simply state that crude is not available. At some point, we paid $6 over and above the market price. This has forced us to reduce our output as well as import crude from countries as far as the US, increasing our cost of production…

“It appears that the objective of the IOCs is to ensure that Nigeria remains a country which exports Crude Oil and imports refined Petroleum Products. They (IOCs) are keen on exporting the raw materials to their home countries, creating employment and wealth for their countries, adding to their GDP, and dumping the expensive refined products into Nigeria - thus making us to be dependent on imported products. It is the same strategy the multinationals have been adopting in every commodity, making Nigeria and Sub-Saharan Africa to be facing unemployment and poverty, while they create wealth for themselves at our expense. This is exploitation - pure and simple. Unfortunately, the country is also playing into their hands by continuing to issue import licences, at the expense of our economy and at the cost of the health of the Nigerians who are exposed to carcinogenic products.

"In spite of the fact that we are producing and bringing out diesel into the market, complying with ECOWAS regulations and standards, licences are being issued, in large quantities, to traders who are buying the extremely high sulphur diesel from Russia and dumping it in the Nigerian Market. Since the US, EU and UK imposed a Price Cap Scheme from 5th February, 2023 on Russian Petroleum Products, a large number of vessels are waiting near Togo with Russian ultra-high sulphur diesel and, they are being purchased and dumped into the Nigerian Market.

"In fact, some of the European countries were so alarmed about the carcinogenic effect of the extra high sulphur diesel being dumped into the Nigerian Market that countries like Belgium and the Netherlands imposed a ban on such fuel being exported from its country, into West Africa, recently. It is sad that the country is giving import licences for such dirty diesel to be imported into Nigeria, when we have more than adequate petroleum refining capacity locally...” 

It would be recalled that in May, Belgium and Netherland adopted new quality standards to halt the export of cheap, low-quality fuels to West Africa, harmonising its standards with those of the European Union. These measures synchronise fuel export standards with the European domestic market, specifically targeting diesel and petrol with high sulphur and chemical content. Historically, these fuels, with sulphur content reaching up to 10,000 ppm, were exported at reduced rates to countries like Nigeria and other West African consumers.

Belgium’s Minister of Environment, Zakia Khattabi, announced that his country followed the Netherland, which in April 2023 also prohibited the export of low-quality petrol and diesel to West Africa via the ports of Amsterdam and Rotterdam. Khattabi emphasised that the Netherlands’ decision to restrict dirty fuel exports had redirected the trade to Belgium, now used by oil producers and traders to export gasoline with excessively high levels of benzene and sulphur.

“For far too long, toxic fuels have been departing from Belgium to destinations including Africa. They cause extremely poor air quality in countries such as Ghana, Nigeria, and Cameroon and are even carcinogenic,” said Khattabi.

In September 2017, an investigation by an international organisation, Public Eye revealed that polluted and toxic fuels were being exported on a large scale from the ports of Rotterdam and Amsterdam for export to African markets. As much as a quarter of the petrol and diesel available in West Africa originates from the ports of Amsterdam, Rotterdam, and Antwerp. These fuels contain sulphur and other pollutants, such as cancer-causing benzene, in quantities up to 400 times the limits permitted in Europe. The Netherlands and Belgium were enjoined to enforce regulations to shield millions of Africans from exposure to toxic fuels.

The decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in granting licenses indiscriminately for the importation of dirty diesel and aviation fuel has made the Dangote refinery to expand into foreign markets. The refinery has recently exported diesel and aviation fuel to Europe and other parts of the world. The same industry players fought us for crashing the price of diesel and aviation fuel, but our aim, as I have said earlier, is to grow our economy.

He noted that because the refinery meets the international standard as well as comply with stringent guidelines and regulations to protect the local environment, it has been able to export its products to Europe and other parts of the world.

While appealing to the Federal Government and the National Assembly to urgently intervene for speedy implementation of the PIA and to ensure the interest of Nigeria and Nigerians are protected, he said: "Recently, the government of Ghana, through legislation has banned the importation of highly contaminated diesel and PMS into their county. It is regrettable that, in Nigeria, import licences are granted despite knowing that we have the capacity to produce nearly double the amount of products needed in Nigeria and even export the surplus. Since January 2021, ECOWAS regulations have prohibited the import of highly contaminated diesel into the region.”

A collaborative effort involving the Nigerian Embassy in Dakar and a Senegalese NGO has led to the rescue of 24 Nigerian girls from s*xual exploitation in the Tamaccounda and Kedougou regions of Senegal.

The collaborative effort successfully freed the girls from their exploitative situation.

The acting Ambassador of the Nigerian Embassy in Dakar, Salihu Abubakar, revealed the details to the News Agency of Nigeria on Sunday.

According to him, the victims, mostly girls and women aged between 11 and 24, but predominantly underage girls, were trafficked to Senegal through Cotonou, Benin Republic, via the Mali-Senegal border for s*xual exploitation.

"These girls and many more are being trafficked to Senegal through Cotonou, Benin Republic via Mali to the Senegal border for prostitution," Abubakar explained.

Preliminary investigations indicate that the majority of the girls and women were school dropouts from Edo and Delta states, with a few others from Imo, Abia, and two from Plateau. Abubakar confirmed that out of the 24 girls and women, 22 had been repatriated weeks earlier, while the remaining two returned safely to Nigeria on Saturday.

The health status of the victims and details regarding the duration of their exploitation remain undisclosed. However, the diplomat emphasised that the successful repatriation highlights the strong international cooperation between the embassy and the NGO, "Free the Slaves" (La Lumiere in French), in combating human trafficking.

"Our main goal and number one priority is to discourage the trafficking of our Nigerian girls to any part of the world for prostitution under any guise," Abubakar said.

The gradual erosion of governance at the local government level and the attendant collapse of both physical and administrative structures are leading legal experts and civil society organisations to pose serious questions about Nigeria’s democratic credentials with visible threats to constitutional orders.

The ongoing political battle between the Rivers State Governor Siminalayi Fubara and a faction of the state assembly over the tenure of local government chairmen has also exposed the extent to which virtually all the states have gone to undermine the constitutional order, with local government elections dependent on the whims of the governors rather than the law.

Defence and security experts who spoke with LEADERSHIP Sunday backed a recent assertion by the Chief of Defence Staff, General Christopher Musa, that insecurity in many parts of the country, particularly the north, is linked to the absence of local government administration.

Stakeholders who spoke with LEADERSHIP Sunday identified corruption and political dominance as the major incentives pushing governors to disregard the constitution, and Supreme Court rulings and even resort to the deployment of violence in their efforts to control local council authorities and finances.

At stake is trillions of Naira of local government funds. Between January and May 2024, all three tiers of government shared N5.759 trillion from the federation account. The 774 LGAs received N1.416 trillion on this figure.

LEADERSHIP Sunday estimates that the 774 LGAs could collect as much as N3.39 trillion in the whole of 2024.

In January 2024, the LGAs got N288.928 billion, N278.041 billion in February, N267.153 billion in March, N288.688 billion in April, and N293.816 billion in May.
Investigations and expert opinion sought by LEADERSHIP Sunday also show that the effects of weak or absent local authorities is all-encompassing, undermining democracy, fueling insecurity, breeding corruption and raising tension between state governments and the general public on the one hand, and between the states and the federal government on another.

Findings by our correspondents show that virtually all of the present state governors have at one point or another appointed caretakers in breach of Nigerian laws and against Supreme Court rulings. Some, like Osun governor, Ademola Adeleke, have gone as far as sacking elected local government chairmen.
But Anambra could take the prize for illegality as our correspondent reports that local government elections were last held in 2014, a decade ago.

In Rivers State, where the debate has been about which of two wrongs will make a right, the tenure of the elected local government chairmen expired on June 17, 2024.

The governor immediately replaced them with caretakers, while the state assembly insisted it had extended their tenure through a a questionable piece of legislation.
States that have conducted LG elections within the last three years include Sokoto, Kaduna, Plateau, Yobe, Ebonyi, Enugu, Kebbi, Niger, Adamawa, Oyo, Katsina, Ekiti, Borno, Gombe and Edo.

Lagos last held LG elections in July 2021, but does not plan to hold another until 2025, exceeding the three years mandated by law.
In other states, local government elections were last held in Kwara State in 2017, 2018 in Imo, December 2020 in Kogi, October 2020 in Akwa Ibom, May 2020 in Cross River, and June 2021 in Jigawa, with no signs of elections holding soon.

Bauchi State last conducted local government elections in October 2020. In Abia, too, the last election was in 2020, while in Delta, it was in March 2021.
And while the federal government has tried various means to restore constitutionality and autonomy to the local government system, some legal luminaries have disagreed with the approach.
Several Senior Advocates of Nigeria are sharply divided over the suit filed by the federal government against the 36 states of the federation on autonomy for the 774 LGAs in the country.

The attorney-general of the federation (AGF) and minister of justice, Lateef Fagbemi, SAN, had dragged the state governments to the Supreme Court over illegal control of LGs by the state governors.
Specifically, the suit is seeking full autonomy for local governments as the third tier of government in the country.

FG has no locus filing suit for LG autonomy – Awa Kalu

Dr Ahmed Raji, SAN, a former Resident Electoral Commissioner, REC, in about five states including Kano; Chief Awa Kalu, SAN, Professor of law and former Attorney-Genetal of Abia state, and Barrister Paul Omoluabi, a constitutional lawyer, all took different positions on the federal government’s suit at the Supreme Court.

While Prof Kalu said the Association of Local Government of Nigeria, ALGON, should have been the legally recognised body to file the suit and not the FG, Dr Raji said since parties have surrendered themselves before the court, the apex court should be allowed to determine the matter one way or the other.

Prof Kalu said, “The proper court to go to, to decide the suit one way or the other is the Supreme Court. The federal government has no locus filing suit on behalf of LGs; why can’t the LGs speak for themselves; after all, they have an umbrella, ALGON, that can do that on their behalf.”

But Dr Raji said, “This case has been submitted for determination, and judgement is being expected, and as a senior lawyer, I should not anticipate what is going to be the judgement of the court. If it is not yet subjudice, it is within my right to comment but being a counsel who has taken a petition and has taken the matter for determination, it would be grossly irresponsible of me to make comments that would try to over-reach the decision of the court.”

On the conduct of LG election, Professor Kalu said the Independent National Electoral Commission, INEC, has no business with LG elections. He also condemned governors that withhold LG funds.
He said, “It is all propaganda; INEC has no business with local government election; it has not even been able to handle its own primary responsibilities well and you still want to hand over another one to it. It is pure propaganda to say you want to hand over LG election to INEC.

“There is no lacuna in the law guiding local governmnent election; it’s all propaganda. There is a Supreme Court judgement that talks about the state having something to do with the running of the local government. There is a Supreme Court judgement to that effect. The Supreme Court made it clear that you can’t be in Abuja and be conducting LG elections in the states.”

Raji on his part said withholding LG funds could lead to anarchy.

According to him, the drafters of the law did not envisage a vacuum in local government administration.
He said, “It is not contemplated that there will be a vacuum; the drafters of our laws did not anticipate that there will be long vacuum after the departure of one regime before another regime comes in. So to find the justification for it may be difficult, but under the doctrine of necessity the governor may be right to put caretaker government in place, but under the constitution, there should be a democratically elected local government but where election is impossible due to disease outbreak that may result in an election not being held, then, the state law will have to provide for a means to keep the government wheels running, but it is not in the contemplation of the law that you can say a tenure is over and there is a gap for one or two years.”

On the conduct of LG elections by INEC, he said the call became necessary because it is believed that the governors are not doing the right thing, as regards the conduct of LG elections.

He said rather than ask INEC to conduct LG elections, the loopholes should be blocked and state independent electoral commissions (SIECs) strengthened to conduct credible elections.
“The reason for this is, it is believed governors are just “messing” up with SIECs; where is the assurance that INEC will fare better?

“I think we need to deepen democracy. If there is anything which the state commission is doing which is not proper, I think we need to block the loopholes and see that they are up and doing because over-centralisation has its own problem.

“I think the monitoring should be more and the judiciary should intervene decisively where there is no semblance of election in any state in respect of the local government councils, so maybe if one or two of them are made examples”, he said.
He also spoke on the attitude of the state governors to withhold LG funds in contravention of the law.
To him, the issue has been put to rest by the Supreme Court in the case between AG Lagos State vs AGF.
He said it is grossly illegal for a governor to withhold funds meant for LG administration.
He said withholding funds meant for the running if govermnent affairs at any level could lead to anarchy.
Constitutional lawyer, Barrister Paul Omoluabi, quoted Section 162(3) of the 1999 Constitution which states:

“The amount standing to the credit of the local government council in the Federation Account shall be paid directly to the local government council.”

He said, “Section 162(4) of the Constitution allows the president to withhold funds from the Federation Account if a state or local government fails to comply with the provisions of the Constitution or any law enacted by the National Assembly.

Ungoverned Spaces Fueling insecurity

Security experts have attributed rising insecurity in the country to the absence of effective local government administration and called for local government autonomy.

The experts said effective local government administration would identify brewing security threats and tackle them to avoid their escalation.

Maj-Gen James Nyam (rtd) said the local government area security committee are formed to identify brewing threats and solve them.

“We have 774 LGAs in Nigeria by the Constitution of The Federal Republic of Nigeria 1999 (as amended). Among the administrative structure of the LGAs, there is an LGA Security Committee which is composed of the LGA chairman as chair, representative of the Armed Forces, the Police, DSS, traditional and religious institutions and other critical stakeholders such as union leaders and CSOs where they exist in that LGA.”
He said the committee serves as a veritable tool identifying all forms of insecurity brewing in the LGA, tracking the sources, isolating them and tackling them.

He, however, said the dislocation of LGAs by state governments had created a vacuum where nobody is carrying out that responsibility.
Speaking further, he said the absence of local government has excluded a lot of Nigerians from political participation, thereby leaving a large population idle.

“Secondly, the LGAs offer the largest platform for inclusiveness and political participation at the grassroots. When you dislocate the LGAs, inadvertently, you are excluding majority of Nigerians from political participation. They are then left idle and the only thing that might result from that situation is insecurity…That is what we currently have in Nigeria in very exponential proportions.”
He identified corruption as the reason for the failure of the LG system.

“It is all due to corruption. We have allowed state governors to take charge of local government funds and they are not ready or willing to let go. It’s my hope that the suit filed by the federal government, pursuant to reinstating LGA autonomy, is the right way to go and, if successful, would assuage or address, majorly, our prevailing security challenges!”

On his part, Brig-Gen Sani Usman (rtd) said an effective local government administration will help address security challenges since most of the challenges are local.

“I have been saying the autonomy and effective functioning of the local government is one of the most critical aspects of fighting poverty, corruption and, most importantly, insecurity in the country. Therefore, there is a very strong link between those issues and local governance. The bulk of the security challenges are local and the solution is local. For example, banditry and kidnapping in the northwest, to the large extent, were due to the mishandling of herders-farmers clashes which could have been mitigated at the local level”.

Governors Behind Failure In LGs – CSOs

Civil Society Organisations (CSOs) working to ensure local government autonomy have accused state governors of causing the failure of the local government system.

They, however, say that scrapping the LG system will not resolve the issues of insecurity and underdevelopment.

The CSOs argue that only financial autonomy will address the problems in the local governments.

According to the CSOs, the collapse of LGs is due to the governors hijacking their funds and not allowing them to fulfill their mandates.

The national team leader of Engaged Citizens, John Mutu,

Highlighted that the lack of financial autonomy and administrative autonomy is the root of the problem.

Mutu stressed the importance of LGs managing their resources and being accountable to the people.

He expressed concern that if the governors appoint caretaker chairmen, they will only be accountable to the governors and not to the people at the grassroots.

Mutu, who previously served as the deputy national team leader of PERL-ECP, a governance programme funded by the UK’s Foreign, Commonwealth Development Office (FCDO), stated that caretakers appointed by the governors at the local government level should not exist.

He explained that the constitution does not provide for caretakers in the absence of elections.

Mutu suggested that the head of administration in the local government, who is the LG secretary, should take charge until elections are conducted.

“If there are no elections, the natural succession should be the most senior civil servant,” Mutu said.

Meanwhile, CSOs and other stakeholders advocating for local government autonomy have organised a one-day planning and reflection meeting in Abuja.

This meeting aims to assess their successes in advocating for local government autonomy and leverage the ongoing constitution amendment.

The CSOs and organised groups believe that the clamour for local government autonomy and independence will ultimately be achieved.

[Leadership]