Efforts by the President of the Senate, Ahmad Lawan to approve a request from President Muhammadu Buhari to restructure a multi- trillion loan advances from the Central Bank of Nigeria, CBN, failed on Wednesday.
Under the administration, the federal government has borrowed over N21 trillion from the Godwin Emefiele-led CBN in form of Ways and Means, W&M in the last seven years.
According to the CBN Act, the bank has powers to advance loan to the federal government to the tune of five percent of government revenue for a budgetary year. Such advances, usually meant for plugging government budget deficits must be paid back within the budgetary year, the Act said.
The administration has flagrantly abused the Act after borrowing so much from the apex bank without immediate plan to pay back, and the decision by the Senate to reject the president’s request to restructure the advances is not unexpected experts say.
President Buhari in a letter to the Senate last week urged the chamber to approve another N1 trillion for the federal government, raising the total Advances to N23.7 trillion.
Buhari further requested in the letter that the advances repayment should be spread for 40 years at an interest rate of nine per cent.
But his request fell flat in the chamber after many senators rejected it, citing abuse of the W&M by the president, who they also accused of not carrying them along before borrowing so much from the bank.
The chamber was thrown into a turmoil after Senator Betty Apiafy raised a point of order that the W&M is alien to Nigerian law as a means of finaning government fiscal deficits.
The decision by Lawan to stop her from making her point further angered many senators, among them Senator Thompson Sekibo who cited Section 38 of the CBN Act as a basis for the Senate to reject the president request.
Sekibo said, “Section 38 of the CBN Act states that any money collected by the federal government as loan or emergency fund in form of Ways and Means advances must be refunded before collection of another.
“The relevant laws quoted clearly show that the N22.7 trillion Ways and Means advance already spent by the federal government without informing the National Assembly was wrong and will be unfair as representatives of Nigerians to approve this request.”
The Buhari administration has been trenchantly critcised for being the highest borrower from the CBN in many years. The previous administration of President Goodluck Jonathan only borrowed less than N1 trillion from the apex bank, from where the current administration took it to the current N22.7 trillion level.
