The Federal Government’s N23.7 trillion Ways and Means approval request is still pending before the National Assembly. When Senate resumed plenary on January 17, the Special Committee on Restructuring of Ways and Means Advances of Central Bank of Nigeria (CBN) requested a three-day extension to enable it look into the matter. The Committee stated that it was yet to receive details of the Ways and Means advances, as efforts to meet with the Minister for Finance, the CBN Governor and heads of relevant government ministries, departments and agencies, fell through. With the expiration of the three-day extension and the Senate’s adjournment of plenary on January 25 to resume on February 28, the request remains unresolved.
It will be recalled that President Muhammadu Buhari wrote to the National Assembly in December 2022 seeking approval for restructuring of Ways and Means balance of N23.7 trillion over a tenure of 40 years, with a three-year moratorium on principal repayment and an interest rate of 9 per cent. Out of this amount, the Federal Government has spent N22.7 trillion over the past ten years. The request caused an uproar among lawmakers, who questioned how such loans could have been taken without the knowledge and approval of the legislature. Indeed, the request threw up several issues that are perceived as violations of section 38 of the Central Bank of Nigeria (CBN) Act 2007, which empowers the Bank to grant temporary advances to the Federal Government to make up for deficiency of budget revenue. Section 38(2) provides that the total amount of such advances outstanding shall not at any time exceed five per cent of the Federal Government actual revenue for the previous year. Subsection 3, paragraph (a) of the provision states thus:
(3) 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 years shall not be exercisable, unless the outstanding advances have been repaid;
The outstanding amount of N23.7 trillion, which was reported to have been loaned to the Federal Government over 10 years appears to exceed the five per cent threshold provided by law. Also, the President is only seeking the approval of the National Assembly barely five months to the end of his tenure. The CBN also appears to have continued to make such advances available to the Federal Government when previous ones were still unpaid, in contravention of the provision. It is still unclear what these funds were used for.