Senate approves Buhari’s plan to borrow N819.5bn, suspends request to restructure N22.7trn loans

The Senate on Wednesday approved plan by President Muhammadu Buhari to borrow N819.5 billion to finance the 2022 supplementary budget.

However, the law makers suspended action on the request of the President to restructure the N22.7 trillion loans his administration obtained from the Central Bank of Nigeria (CBN) under its Ways and Means provision.

The Ways and Means 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 five percent of the prior year’s revenues.

However, since the government started experiencing a significant shortfall in revenue, it has relied heavily on the CBN 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 nine percent.

Daily Trust reports that the president’s request generated uproar in the Red Chamber during consideration of a report by its Committee on Finance which worked on the president’s request.

READ: How Senate President, Lawan, railroaded senators to approve $22.7b loan for Buhari

Trouble started when Senator Betty Apiafy (PDP, Rivers) raised a point of order that the “Ways and Means” is not known to Nigerian law to finance government fiscal deficits.

She was, however, ruled out of order by the 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 one.

“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.”

Sekibo’s submission threw the session into a rancour. Efforts by Lawan to call his colleagues to order proved abortive, forcing him to call for an executive session.

After the closed session, which lasted about an hour, the Senate resolved to stay action on 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 17th January 2023, when the Senate resumes plenary from the New year break.