SENATE HAS APPROVED PRESIDENT BUHARI'S N22.7 BILLION LOAN REQUEST

Through its Ways and Means provision, the Senate approved the restructuring of N22.719 trillion borrowed by the Federal Government from the Central Bank of Nigeria (CBN).

The request was approved by the upper legislative chamber on Wednesday, May 3, after considering a report from its ad hoc committee, which noted that the federal government had repeatedly borrowed from the CBN, exceeding the 5% threshold set by the CBN Act.

Buhari had urged the Senate last year to approve his proposal to securitize the loan, but the Red Chamber rejected it due to a lack of information.

While appealing to the Senate to reconsider its position, Buhari stated that failure to grant securitisation approval will cost the government N1.8tn in additional interest in 2023.

"Part of the Ways and Means monies were given to State Governments as loans to augment budgetary shortfalls in their various States," stated Senate Leader Ibrahim Gobir when presenting the report.

The majority of the requests for funding to boost Ways and Means were submitted to Mr. President in response to the necessity to finance the budget owing to a revenue shortage. Such demands were made by either the Hon. Minister of Finance, Budget, and National Planning or the Governor of the Central Bank.

Because of financial deficits caused by the COVID-19 epidemic and low oil prices, the Federal Government depended heavily on the Ways and Means to finance its budget deficit in order to keep the country running for the people.

The federal government's funds were actually utilised to fund essential projects around the country.

Because of the severe shortage in government revenue, the Federal Government was forced to borrow repeatedly from the CBN in order to keep the economy from collapsing, exceeding the 5% barrier set by the CBN Act of 2007.

That the Federal Government has completed arrangements to convert CBN loans to tradable securities such as treasury bills and bond issuance through the Ministry of Finance, Budget, and National Planning."