On Wednesday, both the Senate and the House of Representatives passed a bill allowing the Central Bank of Nigeria (CBN) to increase its lending to the Federal Government through the Ways and Means facility. The legislative move raised the allowable credit from the CBN from 5% to 10%.
The Senate modified the CBN Act to facilitate this change, enabling the apex bank to offer more significant short-term financing to bridge the Federal Government’s budget gaps.
During a plenary session, the bill for amending the CBN Act was read for the first time and subsequently advanced.
Senate Leader Opeyemi Bamidele emphasized that this executive bill is crucial for meeting the Federal Government’s immediate and future financial obligations, especially given the rising need for funds to cover budget deficits and other expenditures.
He argued that the increased loans would provide essential funds to maintain financial stability, support vital sectors like agriculture, healthcare, and infrastructure, and potentially create jobs.
Bamidele also noted that these loans would reduce the government’s borrowing costs by offering cheaper funding compared to traditional borrowing methods.
Despite the bill’s approval, he and other senators emphasised the importance of closely monitoring capital projects to ensure the loans are used exclusively for infrastructure and other significant projects.
Following thorough consideration in the Committee of the Whole, the bill passed its third reading in the Senate. The House of Representatives similarly amended the CBN Act, raising the Ways and Means limit from 5% to 10%.
However, the process was not without controversy. The minority caucus in the House of Representatives staged a walkout in protest against the amendment.
The opposition, led by Minority Leader Kingsley Chinda, argued that the increase would diminish the National Assembly’s oversight and grant excessive discretionary power to the CBN. Chinda proposed a reduction to 2% instead, but the amendment was passed after a vote, prompting the opposition to temporarily exit in protest before returning to continue their objections.
The bill, now awaiting President Bola Tinubu’s signature, saw opposition from various parties in the lower chamber, including the Peoples Democratic Party (PDP), Labour Party (LP), New Nigeria People’s Party (NNPP), and All Progressives Grand Alliance (APGA).
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