· Increases FG’s access to loan from 5% to 15%
By Godfrey AKON
In order to plug the Federal Government’s inability to abide by the terms of the Ways and Means, the House of Representatives toed the path of the Senate and on Sunday approved the upward review of the government’s access to borrowing from the Central Bank of Nigeria, CBN, from 5 percent to 15 percent.
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 receipt of fiscal deficit of not more than five percent of the previous year’s revenue.
However, with the Sunday amendment, the apex bank can now loan the federal government as much as 15 per cent.
The Bill was introduced in the House on Thursday by the Chairman of the House Committee on Banking and Finance, Victor Nwokolo and was passed for second reading.
It was not smooth sailing as the Chairman, House Committee on Water Resources, Hon. Sada Soli, kicked against the approval.
He said: “Mr. Chairman does it mean with this amendment that the CBN somehow advances to Government at 10 percent or is it a wakeup call at the twilight of this government we are changing this from five percent to 15 percent?
“Can the Chairman, Banking and Currency kindly explain this not only to the National Assembly but to Nigerians? Does it mean the CBN granted this advances at 15 percent or what is going on? This is what we don’t know, Chairman.”
Responding, the Deputy Speaker, Hon Ahmed Wase, who presided over the Committee of the Whole said: “Hon. Sada, the only explanation I may attempt to give if I listened to you very carefully is this, the Chair has the right to commit after second reading any bill to the Committee of the Whole.
“It is there contained in our Standing Order. It depends on the importance and the exigency of the moment. And in light of this I want to beg our Colleagues to please consider this amendment and we pass it so that we have the right thing done.”
The House of Representatives on May 4, 2023 approved an additional N1 trillion Ways and Means advances for the implementation of the 2022 Supplementary Appropriation Act as passed by the National Assembly as the loans hit N23.7 trillion
The House also approved the Securitization of the total outstanding Ways and Means amount under the following terms: Amount (N23,719,703,774,306.90), Tenure (40 years) , Moratorium on Principal Repayment (3 years), and Pricing/Interest Rate (9 percent per annum)
Also, the House passed a bill seeking to extend the implementation of the Capital Aspect of the 2022 Supplementary Appropriation Act from 30th June, 2023 to 31st December, 2023.
The bill which seeks to approve the sum of N819 billion for capital expenditure and for related matters was considered at the Committee of Supply, thereby raising the budget deficit for 2022 to N8.17 trillion and deficit GDP ratio to 4.43 percent.
The House adjourned plenary to Tuesday, May 30, 2023.
