Senate increases CBN’s ways and means advances to FG from 5% to 15%

The Nigerian Senate has increased the Central Bank of Nigeria (CBN) ways and means advances to the Federal Government from five per cent to 15 per cent days before Bola Tinubu’s administration takes over.

The Senate reviewed the clause in the CBN Act that allows the financial regulator to loan FG 5 per cent of the government’s revenue the preceding year during an emergency plenary on Saturday.

Ripples Nigeria understands that the emergency meeting in the upper chamber was held two days before President Muhammadu Buhari hands over the presidential seat to Tinubu on May 29, 2023.

Criticism have trailed the FG and the CBN for obtaining more than 5 per cent as required by the apex bank Act despite failing to repay the previous debt borrowed the preceding years.

The CBN ways and means advances borrowed by the FG was N22.7 trillion as of 2022, as a result, Nigeria’s total debt profile has risen from N46 trillion to about N70 trillion in 2023.

Following the criticism, the Senate has now increased the ways and means advances by 10 per cent, as the Senate Leader, Abdullahi Gobir, said the increase will enable FG access enough credit to meet its short and longterm financial obligations .

READ ALSO: Buhari urges Senate to approve restructuring of CBN N22trn loans

Recall that former President Olusegun Obasanjo and previous CBN governor, Soludo, had initiated the ways and means advances to serve as a last resort for loan should foreign and domestic creditors not borrow FG capital.

Meanwhile, the Senate also extended the implementation timeframe for the 2022 Supplementary Appropriation Act from June 30, 2023 to December 31, 2023.

Note that the Supplementary Appropriation Act was approved by the Senate in December 2022, with implementation deadline initially fixed to June 2023, however the lawmaker stated that the capital released for the implementation of projects tied to the Supplementary Appropriation Act have not been totally utilised.

It was revealed that the Ministries, Departments and Agencies (MDAs) are in possession of the remaining capital, to ensure total utilisation and prevent projects being abandoned, the Senate said, adding, that there’s a need to extend the timeframe by six months.

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