The Senate, on Wednesday, approved the N22.719,703,774,306.90 trillion ‘Ways and Means’ advances taken from the Central Bank of Nigeria (CBN) by the Federal Government.
It was sent to the Senate last year by President Muhammadu Buhari. Ways and Means are loans or advances given by the CBN to the Federal Government to enable it cater for short term or emergency finance to fund delayed government expected cash receipt of deficit.
Adopting the report of its special committee on Ways and Means which considered the president’s request, the Senate said: “The restructuring sum of N22, 719,703,774,306.90 trillion for Ways and Means Advances was approved because the advances were made to ensure that the government does not shutdown.”
The upper legislative chamber also approved the sum of N180,463,062,187 billion being the balance of the supplementary budget and interest accrued on the Ways and Means Advances.
It warned that “if there is a need to exceed the five per cent threshold of the prior year’s revenue, recourse must be made to the National Assembly for approval.”
It also tasked the Federal to begin the process of recovering the portion of the Ways and Means given as loans to state governments, saying further deferment of the repayment of the loans by states will not be healthy for the economy.
The Senate also urged the Federal Government to expedite action on the repayment of the loans through treasury bills and bond issuance.
It said the National Assembly would not condone future increase in the Ways and Means without seeking the approval of the National Assembly.
Presenting the report of the special committee, its chairman and Senate Majority Leader, Ibrahim Gobir, said the committee found out that “part of the Ways and Means monies were given to State Governments as loans to augment budgetary short fall in their various states.”
It was equally revealed that “most of the request for funds for increase in Ways and Means were made to Mr. President on the need to finance the budget due to revenue short fall. Such requests were either made by the Minister of Finance, Budget and National Planning or the Central Bank of Nigeria (CBN) Governor.”
The adopted report of the senate special committee explained that “The Federal Government as a result of revenue shortfalls occasioned by the COVID-19 pandemic and low oil prices, relied heavily on the Ways and Means to finance its budget deficit to keep the country working for the people.”
The report claimed that the monies received by the Federal Government were actually used for funding of critical projects across the country.
“Due to the serious short fall in government revenue, the Federal Government in order for the economy not to collapse, was compelled to borrow repeatedly from the CBN, exceeding the 5 percent threshold of the prior year’s revenue as stipulated by the CBN Act, 2007,” it said.
The report further disclosed that “the Federal Government through the Ministry of Finance, Budget, and National Planning has concluded plans to convert the CBN loans to tradeable securities such as treasury bills and bond issuance.”
Last December, the Senate suspended Buhari’s bid to get the National Assembly to legitimise and ‘restructure’ some N22.7 trillion which the Federal government had taken as ‘Ways and Means’ from the Central Bank of Nigeria.
