The Nigerian Senate has amended the Central Bank of Nigeria (CBN) Act to increase the borrowing limit the bank can offer the federal government from five per cent to 10 per cent.
The borrowing, popularly called Ways and Means, is a loan facility through which the CBN finances the federal government’s budget shortfalls.
Senate President, Senator Godswill Akpabio, announced the increment during an emergency plenary on Wednesday, July 31, 2024 after many of the senators supported it through voice votes.
The Bill was read for the first and second time and committed to the Committee of the Whole where the clauses were considered before final passage.
Senator Akpabio said the increase would support the government to finance its shortfalls.
He urged Nigerians to shun violence in the process of agitating for the end of bad governance.
“We urge Nigerians to shun any act of violence. The government is doing a lot, we in the parliament are also doing a lot,” Senator Akpabio added.
While leading a debate on the amendment, the Senate Leader, Senator Opeyemi Bamidele, explained that the essence of the increment was to enable the government to meet its immediate and future financial obligations.
“The essence of the bill is to enable the federal government to meet its immediate and future obligations due to the increasing need for funds to finance the budget deficit and other expenses.
“The Central Bank of Nigeria advances to the federal government are essentially loans that the Central Bank of Nigeria provides to the government to help meet its financial obligations. These advances are typically short-term and are expected to be repaid by the government,” he said.
He also said it would help the government to maintain financial stability and stimulate the economy.
He further stated that it will “Provide immediate funds to address budget shortfalls and finance essential government expenditure.
“Help maintain financial market stability that will prevent government default on its obligations.
“Inject money into the economy, thereby stimulating economic activity and potentially creating jobs. Enable the government to support its critical sectors like agriculture, and infrastructure development. Lower the government borrowing cost by providing cheaper funds than the traditional borrowing method”.
Many of the senators who contributed to the debate support the increment.
Olusola Akintonde
