Senate raises CBN's advances to FG from 5 to 10%

The Senate has increased the total advances the Central Bank of Nigeria (CBN) could grant to the Federal Government from five to 10 per cent.

To achieve this, the Senate speedily amended the Central Bank of Nigeria (CBN) Act to allow the Federal Government get 10 per cent as against the former five per cent.

Senate President Godswill Akpabio had invited senators into a closed door meeting before the commencement of plenary session which lasted for two hours.

At the end of the closed session, Akpabio said what was discussed was on how to improve the workings of the Senate.

All the three legislative stages (First, Second and Third reading) in passing a bill were ignored as the Bill for the amendment of the CBN Act was given accelerated treatment.

The original original request by sponsor of the Bill and majority leader, Opeyemi Bamidele, was that advances from CBN to the Federal Government be raised to 15 per cent.

Leading the brief debate on the bill, Bamidele said, “The very essence of this Bill my is to enable the Federal Government meet its immediate and future obligation due to the government increasing needs for funds to finance the budget deficits and other expenses.”

He explained that advances from the CBN to the federal government are essentially loans that the CBN provides to the government to help it meet its financial obligations, noting that “these advances are typically short-term and are expected to be repaid by the government.”

According to the Senate leader, the passage and enactment of this amendment into law will provide immediate funds to address budget shortfalls and finance essential government expenditure.

He said it also helps to maintain financial market stability by preventing government default on its obligation.

Bamidele further stated that the increase from 5 to 10 per cent will inject money into the economy, stimulate economic activity and potentially create jobs.

“It enables the government to support critical sectors like agriculture, health care and infrastructural development; and lower the government borrowing cost by providing cheaper funds that the traditional borrowing method.

“This amendment is very consequential and it needs the support of us all. This is to enable the Federal Government to embark on very important projects that will inflate and rejig the economy especially the Renewal Hope Infrastructural Development across the country,” he stressed.

Wednesday’s decision of the Senate ran contrary to expectations following its earlier stand on the N30 trillion Ways and Means taken by former President Muhammadu Buhari’s administration .

Investigation is still ongoing regarding the how and why the N30 trillion Ways and Means was taken and spent.