Senate amends CBN Act, approves extension of 2022 budget to December
The Nigeria’s senate at an emergency session on Saturday amended the CBN Act permitting the apex bank to raise lending limit to government from five percent to 15 percent.
The Senate also passed a bill to extend the implementation of the 2022 supplementary budget to December 31, 2023.
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, 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.
Regarding the 2022 budget extension, 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.
