See the Reasons why the Senate Rejected Buhari’s Request to Restructure N22.7trn in CBN Loans.

See the reasons why the Senate rejected Buhari’s request to restructure N22.7trn in CBN loans.

The Senate declined President Muhammadu Buhari’s request to restructure the payment of N22. 7 trillion in “Ways and Means” that the Federal Government had obtained from the Central Bank of Nigeria (CBN) on Wednesday.

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“Ways and Means” are loans or advances by the Central Bank to the Federal Government, to enable it to cater for short-term or emergency finance to fund delayed government expected cash receipt of fiscal deficits.

President Buhari, last week, asked the Senate to restructure the Ways and Means advances to raise the amount to N23.7trn, with a tenor of 40 years, three years moratorium on repayment and an interest rate of 9%. NewsReport gathered.

The balance of the “Ways and Means” owed by the Federal Government stood at N22.7 trillion as of December 19, 2022.

What Buhari sent to the senate for restructuring is, however, in excess of an additional N1 trillion; bringing the total to 23.7 trillion, which is required by the President to fund the 2022 supplementary budget.

The Senate immediately referred the request to its Committee on Finance with a mandate to report back to it at a later date.

But the Upper chamber erupted in total uproar on Wednesday, even before the report of the Committee could be read and tabled for consideration by the Chairman, Senator, Solomon Adeola Olamilekan (APC, Lagos West) as Senator Betty Apiafi (PDP, Rivers West) raised a constitutional point of order to the effect that “Ways and Means” are not known anywhere in the Nigerian laws for appropriation and expenditure of funds.

According to Apiafi, the only two ways known to the law and available to the Federal Government are through the budget and supplementary budget, and cautioned the lawmakers against any act of illegality.

Although Senate President, Ahmad Lawan, had ruled Apiafi out of order for not allowing the report to be presented before kicking against it, but his action was not enough to quench the opposition to Buhari’s request to restructure the CBN loan.

Citing relevant sections of the 1999 Constitution, the CBN Act and the Senate Standing Order, Senator George Sekibo (PDP River East), established that the two options available to the government for expenditure are only through the budget and supplementary budget.

He said even when the Federal Government can borrow short-term loans from the Central Bank, such monies must still be tabled before the National Assembly for appropriation and paid back to the CBN within the same fiscal year before it (CBN) could grant another request.

“Section 38 of the CBN Act states that any money collected by the federal government as loan or emergency fund in form of Ways and Means advances must be refunded before collection of another one.

“The relevant laws quoted clearly show that the N22.7 trillion Ways and Means advance already spent by the federal government without informing the National Assembly was wrong and will be unfair as representatives of Nigerians to approve this request”, he said.

Sekibo called on the Senate to step down the report, especially as the details of what the N22.7 trillion borrowed from the CBN were yet to be made available to lawmakers.

With the strong arguments against the request, the Senate was immediately forced behind closed doors to reach common ground on the matter.

However, at the resumed hearing at plenary, the lawmakers reached a resolution to step down Buhari’s request to restructure the payment of the N22.7 trillion borrowed by the Federal Government from the Central Bank of Nigeria in the last 10 years.

The upper legislative chamber then constituted an Adhoc Committee chaired by the Senate leader, Ibrahim Gobir (APC Sokoto East), to engage with the CBN, the Minister of Finance, Zainab Ahmed and other relevant government agencies on the breakdown of how the monies were expended.

The Committee is to submit its report on 17th January, 2023, when Senate resumes plenary from the New year recess.

The Senate, however, approved for Buhari to borrow the N819.7 billion in the supplementary budget for 2022 from CBN provision of “Ways and Means.”