The National Assembly has passed a bill allowing for increased CBN loans to the FG, aiming to provide more financial resources.
On Wednesday, a bill was passed by both the Senate and House of Representatives to raise the allowed percentage of Ways and Means loans that can be provided by Nigeria’s Central Bank (CBN) for use by the Federal Government.
The Nigerian legislature’s upper chamber increased the Federal Government’s credit facility available from the apex bank from 5% to 10%.
The highest financial institution, commonly referred to as the Ways and Means, provides brief monetary support to the Federal Government for bridging any gaps in its budget.
The Senate amended the CBN Act in order to boost the overall amount of loans provided by the CBN to the Federal Government.
When it was read for the first time, on Wednesday at plenary, the bill to amend the CBN Act was taken into consideration.
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According to Opeyemi Bamidele, the Senate Leader, a new executive bill was introduced on Wednesday with the aim of helping the Federal Government meet its financial obligations both presently and in future. This move is necessary as there is an increasing demand for funds needed to finance budget deficits and other expenses within government circles.
He clarified that the loans would facilitate accessing urgent funds to tackle budget deficits, support crucial government spending, furthermore ensuring financial market steadiness through averting a potential default on governmental obligations.
The loans from Bamidele can spur economic activity, generate employment opportunities and provide aid to essential sectors such as healthcare, agriculture and infrastructural development.
He stated that using loans would reduce the government’s borrowing expenses by offering more affordable funds than conventional means.
Opeyemi and colleagues contended that the increment margin should range from 5 to 10 percent.
They claimed that, while the surge in funds was imperative for advancing economic growth, it is crucial to improve supervision of capital ventures and guarantee expenditure on infrastructure and legacy schemes only.
Following deliberation in the Committee of the Whole, the executive bill successfully passed its third reading and was approved.
Similar to the Senate, the House of Representatives modified the CBN Act in order to increase Ways and Means from 5% up to 10%.
The amended bill is anticipated to be signed into law by President Bola Tinubu.
