The Senate on Wednesday, approved the request of President Muhammadu Buhari to restructure the N22.7 trillion Ways and Means loan advanced to the Federal Government by the Central Bank of Nigeria (CBN).
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.
The approval followed the consideration of the report of the Senate’s Special Committee on Ways and Means chaired by Senate Leader, Senator Ibrahim Gobir (APC – Sokoto East).
Buhari had last year requested the Senate to approve his proposal to securitise the loan but the Red Chamber rejected the request, citing lack of details.
The President again appealed to the Senate to reconsider its stand, insisting that failure to grant the securitisation approval would cost the government about N1.8 trillion in additional interest in the year.
Senate President, Ahmad Lawan, after the approval of the President’s request, noted that the Ways and Means Advances was a global practice.
He, however, faulted the process adopted by the executive arm of government which failed to carry the National Assembly along while accumulating the huge amount of loans.
Lawan added that the Senate had to pass the Ways and Means Advances so that the National Assembly would be able to consider and pass the 2022 Supplementary Budget still pending before the two chambers.
Earlier, the Senate Leader, Gobir, in his report explained that part of the money were given as loans to state governments
Gobir added that the special committee to scrutinize the fiscal request, put up the report after ‘critical analysis and review of submissions made by the Federal Ministry of Finance, Budget and National Planning; and the Central Bank of Nigeria.
The Senate Leader said the panel discovered that the Ways and Means balance was initially N19,326,745,239,660.20 as of 30th June, 2022 but later grew to N22,719,704,774,306.90 as of 19th December, 2022 as a result of financial obligations to on-going capital projects and additional expenditures which included domestic debt service gaps and interest rate;
He said the Senate on Wednesday, 28th December, 2022, approved the sum of N819, 536,937,813 from the N1 trillion additional request made by Buhari leaving a balance of N180, 463,062,187 being the accrued interest on the amount.
He said the House of Representatives had earlier approved the additional N1 trillion Ways and Means Advances request by Buhari to allow for the smooth implementation of the supplementary budget.
Gobir said the Senate Special Committee, after exhaustive deliberation, recommended among others, that the restructuring of N22, 719,703,774,306.90 for Ways and Means Advances be approved because the advances were made to ensure that the government does not shut down.
The panel further sought the approval of the Senate for the sum of N180,463,062,187 being the balance of the supplementary budget and the interest accrued on the Ways and Mean Advances.
