A Federal High Court in Abuja has dismissed a suit seeking to restrain the federal government from securitising the sum of N22.7 trillion Ways and Means Loan support it got from the Central Bank of Nigeria (CBN).
Justice James Omotosho, on Thursday, held that those who brought the suit lacked the locus standi to institute the case, adding that they failed to establish same in court.
Justin Edim and Akinfewa Akinwunmi, had brought the action through their counsel, Victor Opatola, on behalf of themselves and other Nigerian citizens.
They specifically asked the court to stop the CBN’s 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.
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Those joined in the suit are President Bola Ahmed Tinubu, Federal Government of Nigeria, the CBN, Ministry of Finance, the Debt Management Office (DMO), National Assembly and the Attorney General of the Federation.
Edim and Akinwunmi had in the suit marked: FHC/ABJ/CS/1286/2023 challenged the FG’s December 2022 requested to the 9th National Assembly for permission to securitise the debts they had incurred from the CBN over the years.
They claimed that the series of loans secured from the CBN amounted to N23.7 trillion, and that the FG was planning to restructure the loans to something that could be traded.
They further stated that the FG 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 stipulate that the total amount the FG could borrow shall not at any time exceed five per cent of the previous year’s revenue of the 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.
They further averred 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 would ultimately skyrocket inflation in the country.
In the judgment, Justice Omotosho struck out the name of the National Assembly from the suit as its joinder breached the condition precedent of filing a pre-action notice on the legislature three months before filing the suit.
Challenging the securitisation of the loans granted to the FGN under the Ways & Means, the court upheld the argument of Mr Kofo Abdusalam Alada, the CBN Director of Legal Services, that the CBN has powers to grant the loans and also to allow repayment by way of the securitisation of same pursuant to the provisions of Section 38 of the CBN Act.
The court also noted that the CBN was the only investor, so no inflation would be caused by the securitisation and that the plaintiffs did not place any credible evidence before the court to show breaches by the CBN and the Debt Management Office on the securitisation.
On the right to bring the action, the judge said there was no public forum where the plaintiffs brought the people together or conducted a poll to gather their opinions and views before commencing the action.
He added that they had not shown to the court how the Ways and Means bill affected their personal rights.
The court deprecated the practice of persons, who it described as “busybodies”, rushing to court to waste its time.
No cost was awarded.
