The Senate in an emergency session on Saturday amended the CBN ACT, by raising the Ways and Means borrowing threshold for the Federal Government from 5% to a maximum of 15% from the Central Bank of Nigeria(CBN).
This was coming after the Senate had approved more that the maximum benchmack of 5% earlier which was in itself a violation of the act.
Presenting the bill for amendment, Senate Leader, GOBIR Ibrahim Abdullahi explained that the adjustment was required to enable the Federal Government “meet its immediate and future obligations in the approval of the ways and means and advances to the Federal Government.
Federal Government borrowings from the CBN is put at roughly N22.7 trillion as at December 2022.
The CBN advances to the FG stood at N700 billion before 2015, with the borrowings exceeding the threshold of 5% of FG revenue for the previous years, thereby violating Section 38 of the CBN ACT.
Even more troubling was that most of the money were borrowed and spent without necessary approval by the senate in clear violation of the Constitution.
In addition, the CBN ACT further stipulates that all advances shall be repaid as soon as possible and shall in any event be repayable by the end of the Federal Government financial year in which they are granted and if such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid”.
The FG has repeatedly violated this condition.