Senate Passes Bill To Increase CBN Ways And Means Loans To FG

The Nigerian Senate has approved a bill to double the percentage of Ways and Means loans that the Central Bank of Nigeria (CBN) can provide to the Federal Government.

The legislative body increased the credit facility available to the Federal Government from the apex bank from 5% to 10%.

The Ways and Means program allows the CBN to offer short-term financing to the Federal Government to cover budget shortfalls.

To implement this change, the Senate amended the CBN Act to raise the total CBN advances (loans) to the Federal Government.

During the plenary session on Wednesday, the bill for the amendment of the CBN Act was introduced and read for the first time.

Senator Opeyemi Bamidele, the Leader of the Senate, highlighted that the purpose of this executive bill is to assist the Federal Government in meeting its immediate and future financial obligations due to the increasing need for funds to cover budget deficits and other expenses.

He emphasized that these loans will provide immediate funds to address budget shortfalls, finance essential government expenditures, and maintain financial market stability by preventing government default on its obligations.

Don’t miss out on any real-time information. Join our WhatsApp group to stay updated.

CLICK HERE TO JOIN

Bamidele also pointed out that injecting these loans into the economy will boost economic activity, potentially create jobs, and allow the government to support vital sectors such as agriculture, healthcare, and infrastructure development.

He mentioned that the loans would reduce the government’s borrowing expenses by offering more affordable financing than conventional borrowing methods.

Opeyemi and his team contended that the increased margin should range between 5 to 10 per cent.

They emphasized that while the increase is essential for economic progress, it is crucial to strengthen the oversight of capital projects to guarantee that the funds are exclusively allocated for infrastructure and legacy initiatives.

After deliberation in the Committee of the Whole, the executive bill passed its third reading.

President Bola Tinubu is anticipated to endorse the revised bill into law.