Can Nigeria fund budget without Ways & Means loan?

Nigeria's Senate is gearing up to investigate the 30 trillion naira Ways and Means loans of the Central Bank of Nigeria that were obtained and utilized by the former administration of Muhammadu Buhari. Femi Oladehin, Partner at Argentil Capital Partners, recently joined CNBC Africa to shed light on the country's budget financing strategy, especially in the wake of the weakening naira. Oladehin expressed skepticism about the ongoing probe, emphasizing that ultimately, it is the Nigerian people who will bear the brunt of repaying the loans. He dismissed the probe as mere political theatrics, pointing out that Ways and Means financing had been a critical component of the Buhari government's budget funding for nearly five years. The discussion then shifted towards the need for a clear repayment plan and sustainable revenue generation strategies to relieve the pressures on the central bank. One of the key areas of concern highlighted by Oladehin was the looming challenge of increasing crude oil production to bolster foreign exchange earnings. Despite crude oil being Nigeria's primary revenue source, issues such as illegal refineries and pipeline sabotage in the Niger Delta continue to hinder production levels. He criticized the government's failure to address security lapses in the region promptly, calling for a more concerted effort towards enhancing security infrastructure and incentivizing oil companies to invest in productivity. Regarding budget financing, the new CBN governor's stance on refraining from extending further financing to the government until past obligations are settled raised questions about the fiscal authorities' approach to funding. While acknowledging the improvements in revenue collection and stable oil prices, Oladehin underscored the need to curtail irresponsible spending practices inherited from the previous administration. He stressed the importance of ensuring that government expenditure aligns with key development priorities, thereby optimizing the allocation of resources. In conclusion, Oladehin emphasized the significance of enhancing transparency and accountability in fiscal management to instill confidence in the economy. By redirecting focus towards value-driven investments and prudent spending, Nigeria can navigate its budgetary challenges and pave the way for sustainable growth and stability.