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22.7trn CBN “Ways and Means” Loans to Buhari granted by the Senate
22.7trn CBN “Ways and Means” Loans to Buhari granted by the Senate
The Senate on Wednesday approved the request of President Muhammadu Buhari to restructure the N22.7 trillion loans the Central Bank of Nigeria (CBN) extended to…
The Senate on Wednesday approved the request of President Muhammadu Buhari to restructure the N22.7 trillion loans the Central Bank of Nigeria (CBN) extended to the federal government under its Ways and Means provision.
The Ways and Means provision allows the government to borrow from the apex bank if it needs short-term or emergency finance to fund delayed government cash receipts for fiscal deficits.
Buhari had last year asked the Senate to approve his proposal to secularize the loan, but the Red Chamber rejected the request, citing a lack of details.
The Senate, however, approved the request on Wednesday following the recommendation of its special committee set up to review the presidential request and the submission made by the Finance Ministry and CBN.
It also approved the sum of N180.4 billion, which is the balance of the supplementary budget and the interest accrued on the Ways and Means advances.
The committee chairman, Senator Ibrahim Gobir, told his colleagues that N22.7 trillion in advances were made to ensure that the government does not shut down as a result of revenue shortfalls.
He said the monies received by the federal government were actually used for the funding of critical projects across the country.
The lawmaker said, “Due to the serious shortfall in government revenue, the Federal Government, in order for the economy not to collapse, was compelled to borrow repeatedly from the CBN, exceeding the 5 percent threshold of the prior year’s revenue as stipulated by the CBN Act, 2007.”
He said part of the Ways and Means monies were given to state governments as loans to augment budgetary shortfalls in their various states.
The Red Chamber, however, urged the Federal Government to expedite action on the repayment of the loans through treasury bills and bond issuances.
It also advised the government to begin the process of recovering the portion of the Ways and Means given as loans to state governments, as further deferment of the repayment of the loans by the states will not be healthy for the economy.
