The Nigerian Senate has passed a bill to increase the percentage of Ways and Means loans that the Central Bank of Nigeria (CBN) can extend to the Federal Government from 5% to 10%. This legislative move is aimed at enabling the government to address its budget shortfalls and other financial obligations more effectively.
The bill, which amends the CBN Act, was considered and passed during the Senate’s plenary session on Wednesday. The Senate Leader, Opeyemi Bamidele, explained that the increase is necessary to meet the government’s growing financial needs, particularly for financing budget deficits and essential expenditures.
“The executive bill read for the first time today is to enable the Federal Government to meet its immediate and future obligations due to the increasing need for funds to finance budget deficits and other expenses,” Bamidele stated.
He emphasized that the increased loans would help maintain financial market stability by preventing government default and stimulate economic activity by injecting funds into the economy. This move is expected to create jobs and support critical sectors such as agriculture, healthcare, and infrastructure development.
Bamidele and his colleagues argued that raising the credit facility from 5% to 10% would lower the government’s borrowing costs by providing cheaper funds compared to traditional borrowing methods. They also stressed the importance of ensuring that these funds are used solely for infrastructure and legacy projects through enhanced monitoring of capital projects.
After thorough consideration in the Committee of the Whole, the bill passed its third reading and is now awaiting President Bola Tinubu’s signature to become law.
