The Senate has approved the restructuring of N22.719 trillion borrowed by Federal Government from the Central Bank of Nigeria (CBN) through its Ways and Means provision.
The upper legislative chamber approved the request on Wednesday, May 3, after considering a report from its ad hoc committee, which noted that the federal government repeatedly borrowed from the CBN in the process exceeding the five per cent threshold of the previous year’s revenue as stipulated by the CBN Act.
Buhari had last year asked the Senate to approve his proposal to securitise the loan but the Red Chamber rejected the request, citing a lack of details.
Buhari, while appealing to the Senate to reconsider its stand, said failure to grant the securitisation approval will cost the government about N1.8tn in additional interest in 2023.
Presenting the report, the senate leader, Ibrahim Gobir, said: “Part of the Ways and Means monies were given to State Governments as loans to augment budgetary shortfall in their various States.
Most of the requests for funds for an increase in Ways and Means were made to Mr President on the need to finance the budget due to revenue shortfall. Such requests were either made by the Hon. Minister of Finance, Budget and National Planning or the Central Bank Governor.
The Federal Government as a result of revenue shortfalls occasioned by the COVID-19 pandemic and low oil prices, relied heavily on the Ways and Means to finance its budget deficit to keep the country working for the people.
The monies received by the Federal Government were actually used for funding critical projects across the country.
That 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 per cent threshold of the prior year’s revenue as stipulated by the CBN Act, 2007.
That the Federal Government through the Ministry of Finance, Budget, and National Planning has concluded plans to convert the CBN loans to tradable securities such as treasury bills and bond issuance.”