The Senate has approved the upward review of the Ways and Means loan accessible to the Federal Government from five to 15 percent.
The Senate said the essence of the bill was to enable the Federal Government to meet its immediate and future obligations through the approval of the ways and means by the National Assembly and advances to the Federal Government by the Central Bank of Nigeria (CBN).
The lead debate was sponsored by Ibrahim Gobir (Sokoto East Senate Leader) and was tagged on the Central Bank of Nigeria Act (Amendment) Bill, 2023 (SB. 1125).
He said, “Mr. President, my respected colleagues, permit me to lead the debate on this bill, which seeks to amend the Central Bank of Nigeria (CBN) Act to increase the total CBN advances to the Federal Government from five percent to a maximum of fifteen percent (15 percent).
“The bill was read for the first time in this chamber on Wednesday, May 24, 2023.
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“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.
“I, therefore, urge you all to support the passage of this bill.”
The National Assembly recently approved the request of the President to restructure the N22.7 trillion overdraft through Ways and Means from the CBN extended to the Federal Government under its Ways and Means provision.
According to the Collins dictionary, “ways and means” are the revenues and methods of raising the revenues needed for the functioning of a state or other political unit.
The term “ways and means” was first used in the Parliament of England and refers to the provision of revenue to meet national expenditure requirements and implement the objectives of economic policy.
Also, an expert, the chief executive of Cowry Asset Management, Johnson Chukwu, defined Ways and Means as the money that the CBN lends to the Federal Government in the meantime to augment spending based on the time the revenue is generated within the same year.
He said, “Ways and Means is a way in which the Federal Government raises funds by borrowing from the CBN. Such is done either through bonds or Treasury bills.”
According to the CBN Act, the ways and means must not exceed five percent of the previous year’s revenue.
The CBN Act Section 38(2) and (3) states, “That Ways and Means shall not exceed 5 percent of the previous year’s revenue of the Federal Government.”
Unless the outgoing president signs the bill into law, the amendment may become ineffective until the next Senate commences fresh work on it or the incoming president signs it into law before the dissolution of the parliament in June.
(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
