By Nathaniel Zaccheaus, Abuja
The National Assembly yesterday passed a fresh amendment to the Act which established the Central Bank of Nigeria (CBN).
The amendment increased the apex bank’s threshold of Ways and Means Advances to the Federal Government from five per cent to a Maximum of 10 per cent.
However, at the House of Representatives, some opposition lawmakers in the House of Representatives staged a walkout after the House approved an amendment to the Central Bank of Nigeria Act, to raise the ceiling of Ways and Means Advances from the apex bank to the Federal Government from five to 10 per cent.
The Green Chamber approved at an emergency plenary presided over by the Speaker, Abbas Tajudeen.
The move came a few months after the CBN governor, Olayemi Cardoso, declared that the apex bank would no longer give Ways and Means to the President until the previous loans were repaid.
While appearing before the Senate Committees on Finance, Appropriations, Banking, Insurance, and other Financial Institutions, Olayemi noted that it was one of the measures taken by the apex bank to curtail the economic downturn currently plaguing the country.
Ways and Means is the money that the Central Bank of Nigeria lends to the Federal Government in the meantime to augment spending based on the time the revenue is generated.
Originally captured to increase the loan limit to 15 per cent, the initial bill read by the speaker was titled “A Bill for an Act to Amend the Central Bank of Nigeria Act, to increase the Central Bank of Nigeria’s total advances to the Federal Government from five per cent to a Maximum of Fifteen per cent and for Related Matters.
It was however reduced to 10 per cent after some lawmakers objected.
The House had dissolved into Committee of the Whole to consider the report on the bill, with the Deputy Speaker, Deputy Speaker, Benjamin Kalu as the chairman.
When the bill was put to debate by Kalu, minority leader, Kingsley Chinda, advised the house to reduce the loan limit to two per cent to ensure accountability and transparency.
But the Chairman of the House Committee on Finance, James Falake, quickly interjected, insisting that the present five per cent was not enough for the government to rely on.
“What we are doing is for the survival of the economy. We need to move away from what we are now to 15 per cent. Bringing down the rate to two per cent isn’t what will bring transparency”, he states.
However, Rep Isiaka Ayokunle suggested that the limit should be increased to 10 per cent, saying that “this will ensure the managers of the economy to serve with caution.
“It will ginger them to work hard and not feel that they have something somewhere to rely on”, he added.
A former deputy speaker, Ahmed Idris, also approved Ayokunle’s suggestion that it should be raised to 10 per cent.
After the debate, the Deputy Speaker put the motion of amending the bill to reflect 10 per cent to voice vote. Though the voices of nays were louder than those who agreed, the deputy speaker said the ‘ayes’ have it.
At this point, some lawmakers belonging to opposition parties staged a walkout to register their pleasure despite pleas by the deputy speaker that the increase was also a allow the government to fund the new N70,000 minimum wage.
“The money for the increment has to come from somewhere. We know how the Ministry of Finance and others are working. Those that said 15 per cent said it is too high. This is within industry taxes. It is all for the welfare of this country”, Kalu said.
In the Upper Chambers, the Senate Leader, Opeyemi Bamidele, who led the debate said, “Permit me to lead the debate on this Bill which seeks to amend the Central Bank of Nigeria (CBN) Act to increase the total CBN advances to Federal Government.”
He said, “The Bill was read for the first time in this Chamber on Wednesday, July 31, 2024.
“The very essence of this Bill is to enable the Federal Government to meet its immediate and future obligation due to the government’s increasing need for funds to finance the budget deficits and other expenses.
“The Central Bank of Nigeria’s Advances to the Federal Government are essentially loans that the Central Bank of Nigeria provides to the government to help it meet its financial obligations.
“These Advances are typically short-term and are expected to be repaid by the government. The passage and enactment of this amendment into law will provide immediate funds to address budget shortfalls and finance essential government expenditures.
“It will also help to maintain financial market stability by preventing government default on its obligation. The government would be able to inject money into the economy, stimulating economic activity and potentially creating jobs
“It will enable the government to support critical sectors like agriculture, health care, and infrastructural development. It will lower the government borrowing cost by providing cheaper funds than 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 Renewed Hope Infrastructural Development across the country.”
Senators Adetokunbo Abiru, Babangida Hussaini, Aliyu Wadada, Adams Oshiomhole, Ibrahim Dankwambo, and Solomon Adeola supported the Bill.
After the debate, the Senate approved that the Bill be read for the third time and passed when its clauses were put to voice vote by Senate President Godswill Akpabio.
