The Senate on Wednesday rejected the request of President Muhammadu Buhari to restructure the N22.7 trillion loans the Central Bank of Nigeria (CBN) extended to the federal government under its Ways and Means provision.
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.
Provisions in the act cap monetary financing of fiscal deficits at 5 per cent of the prior year’s revenues.
However, since the government started experiencing a significant shortfall in revenue, it has relied heavily on the central bank to finance its expenditure programmes via Ways and Means.
The Ways and Means balance as of December 19, 2022 stood at N22.7 trillion.
President Buhari had last week asked the Senate to restructure the Ways and Means advances to raise the amount to N23.7trn with a tenor of 40 years, three years moratorium on repayment, and an interest rate of 9 per cent.
This, however, generated uproar in the Red Chamber during the consideration of a report by its committee on finance which worked on the presidential request.
Trouble started when Senator Betty Apiafy (PDP, Rivers) raised a point of order that the “Ways and Means” was not known to Nigerian law to finance government fiscal deficits.
She was, however, ruled out of order by Senate President Ahmad Lawan for not allowing the report to be presented before kicking against it.
Also, Senator Thompson Sekibo (PDP, Rivers), while citing constitutional provisions and Section 38 of the CBN Act, kicked against the request.
He said, “Section 38 of the CBN Act states that any money collected by the federal government as loan or emergency fund in form of Ways and Means advances must be refunded before collection of another.
“The relevant laws quoted clearly show that the N22.7 trillion Ways and Means advance already spent by the federal government without informing the National Assembly was wrong and will be unfair as representatives of Nigerians to approve this request,” he said.
Sekibo’s submission threw the Red Chamber into a rancorous session. Efforts by the Senate president to call his colleagues to order proved abortive, forcing him to call for an executive session.
After the closed session which lasted for about one hour, the Senate resolved to step down the restructuring of the N22.7 trillion CBN loans but approved the borrowing of N819.5bn to fund the 2022 supplementary budget.
It also constituted a special committee to engage the Minister of Finance, Zainab Ahmed; CBN governor, Godwin Emefiele; and heads of other relevant agencies for details on expenditure made from the N22.7 trillion.
The committee, headed by the Senate Leader, Ibrahim Gobir (APC Sokoto East), is to submit its report on January 17 when Senate resumes plenary from the New Year recess.