Ways and Means: Reps concur with Senate, increase FG’s threshold to borrow from CBN

The House of Representatives has increased the limit within which the federal government can borrow from the Central Bank of Nigeria.

The House, in an emergency session on Sunday, passed the bill to amend section 38 of the CBN Act.

Section 38 of the Act gives the CBN the power to borrow from the Central Bank. However, the funds the federal government can borrow must not exceed five per cent of the previous year’s actual revenue of the government.

The bill, sponsored by Victor Nwokolo (PDP, Delta), was passed for second reading on Thursday without debate.

“(1) Notwithstanding the provisions of section 34 (d) of this Act, the Bank Advances may grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue at such rate of interest as the Bank may determine,” Section 38 of the CBN reads in part.

It further states, “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.

“(2) All Advances made pursuant to this section shall be repaid-

“(a) 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,” section 38 of the Act says.

The bill was considered by the Committee of the Whole and passed for third reading without any opposition.

With this, the House has now concurred with the Senate; hence the National Assembly can transmit the bill to the president for assent.

It appears as though Mr Buhari, who will exit the office on Monday, is making efforts to sort out the ways and means before leaving the office.

READ ALSO: Reps approve Buhari’s request to borrow another N1 trillion from CBN

It is uncertain when the National Assembly, which winds down in June, will send the bill to the president for assent.

Earlier this month, the National Assembly approved the request by the president to convert the N23.7 trillion loan to a 40-year bond.

Meanwhile, the House also passed the amendment to the 2022 supplementary budget to extend the life of the bill till December 2023.

Speaking before adjourning the House, Speaker Femi Gbajabiamila commended the lawmakers for attending the emergency session despite the short notice.