The Senate has amended the Central Bank of Nigeria (CBN) Act to raise the total advances the bank can make to the federal government from five per cent to 15 per cent.
The Senate also passed a bill to extend the implementation of the 2022 supplementary budget to December 31, 2023.
The two bills, which were both read for the first time, were passed at an emergency plenary of the Senate on Saturday which lasted for about an hour.
The bills were sponsored by the Senate leader, Gobir Abdullahi (APC, Sokoto East).
Leading the debate on the amendment of the CBN Act, the Senate leader said it was necessary to raise the limit of loans that the apex bank can grant to the federal government because it will enable the government to meet its “future obligation in the approval of the Ways and Means by the National Assembly.”.
“The very essence of this Bill, my respected colleagues, is to enable the federal government to meet its immediate and future obligation in the approval of the ways and means by the National Assembly and advances to the federal government by the Central Bank of Nigeria,” he said.
Continuing, Mr Abdullahi said: “This amendment is very consequential and it needs the support of us all. This is to enable the federal government to embark on very important projects that will inflate and rejig the economy.”
Under the CBN Act, 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 expected cash receipts of fiscal deficits.
The Senate had on Wednesday 3 May approved a request by President Muhammadu Buhari to restructure the N22.7 trillion loans the CBN extended to the federal government under the provision.
The Buhari administration had relied heavily on the CBN to finance its expenditure programmes via Ways and Means, which balance as of December 19, 2022, stood at N22.7 trillion.
The federal government had said the loan will be repaid with securities such as treasury bills and bonds issuance.
The 2022 supplementary budget of N819,536,937,813 was passed by the Senate last December to finance some unplanned situations that occurred as a result of flooding and other events with a mandate to end the implementation on March 31, 2023.
President Muhammadu Buhari in his letter to the Senate while seeking approval of the supplementary budget last year said it would be financed through “additional domestic borrowings.”
At the emergency plenary, the bills titled “2022 supplementary Appropriation Act (Amendment) Bill, 2023 (SB.1124) and Central Bank of Nigeria (CBN) Act (Amendment) Bill 2023 (SB. 1125) were read the first time and adopted after which they were passed for second and third reading respectively before they were approved.
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Leading the debate on the bill at the emergency plenary, Mr Abdullahi said it was necessary to extend the implementation of the budget because some “significant amounts of funds remain with MDAs”.
He said it is better for the Senate to extend the life span of the supplementary budget in order to avoid situations of abandoned projects.
“Your Excellency, you would recall that the National Assembly extended the implementation of the 2022 Supplementary Appropriation Act from 31st December 2022 to 31st March, 2023. This was to allow full implementation of the budget, especially in light of the 2022 Supplementary budget approved in December 2022 the extension had allowed MDA’s to utilize a large proportion of funds released to them. However, significant amounts of funds remain with MDAs and will require a further extension to be fully expended,” he said.
“Given the critical importance of some key projects nearing completion, requesting a further extension of the expiration clause in 2022 Supplementary Appropriation Bill and the Long Title and Explanatory Memorandum is expedient to avoid compounding the problem of abandoned projects, given that some of the projects were not provided for in the 2023 Budget,” he added.
“I, therefore, urge my colleagues to give their full support to this Bill to allow full utilization of the Capital releases in order to help reflate the economy while I move that the two bills be referred to the committee of the whole for clause by clause consideration.”
The Senate President, Ahmad Lawan, directed the Clerk to the National Assembly to transmit the two bills to the executive arm of government for the president’s assent.
President Buhari must sign the bills before 11:59 p.m. on Sunday when his tenure expires or it will be left to the consideration of President-elect Bola Tinubu, who will be inaugurated on Monday.
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