The Senate on Wednesday approved 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.
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 Federal Government had said it will repay the loan with securities including treasury bills and bonds issuance.
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Recall that the lawmakers had earlier declined their approval after President Muhammadu Buhari asked the senate to approve the sum in December 2022.
They demanded that records of what the funds were spent on be provided before approval is given to the request.
Buhari, while appealing to the Senate to reconsider its stand, said failure to grant the securitisation approval will, however, cost the government about N1.8 trillion in additional interest in 2023.
However, the loan received legislative nod on Wednesday, following the consideration of a report presented at plenary by Senate leader, Ibrahim Gobir.
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Gobir explained that part of the money were given as loans to states.
He said the Special Committee set up by the Senate to scrutinise the fiscal document, 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.
Gobir 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 ongoing capital projects and additional expenditures which includes domestic debt service gaps and interest rate.
He said the Senate, on Wednesday, December 28, 2022, approved the sum of N819, 536,937,813 from the one trillion naira additional request made by the President, leaving an outstanding balance of N180,463,062,187 being the accrued interest on the sum.
The Senate leader said some of the beneficiaries of the funds included the office of the accountant-general of the federation, ministry of foreign affairs (ECOWAS national unit), Nigeria Bulk Electricity Trading, Azura Power West Africa, Niger Delta Power Holding Company, as well as Accugas Limited.
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