Ways and Means: Senate increases FG’s borrowing from 5 to 15% loan

The Senate has approved the upward review of the Ways and Means loan accessible to the Federal Government from five to 15 percent.

According to the lawmakers, the very essence of the Bill was to enable the Federal Government to meet its immediate and future obligations in the approval of the ways and means by the National Assembly and advances to the Federal Government by the Central Bank of Nigeria.

According to the Collins dictionary, Ways and Means are the revenues and methods of raising the revenues needed for the functioning of a state or other political unit.

The term “ways and means” was first used in the Parliament of England and refers to the provision of revenue to meet national expenditure requirements and implement the objectives of economic policy.

Also, an expert, the chief executive of Cowry Asset Management, Mr. Johnson Chukwu, defined Ways and Means as the money that the CBN lends to the Federal Government in the meantime to augment spending based on the time the revenue is generated within the same year.

He said, “Ways and Means is a way in which the Federal Government raises funds, by borrowing from the CBN. Such is done either through bonds or Treasury bills.”

According to the CBN Act, the Ways and Means must not exceed five per cent of the previous year’s revenue.

The CBN Act Section 38(2) & (3) states, “that Ways and Means shall not exceed 5% of the previous year’s revenue of the Federal Government.”

The lead debate sponsored by Senator Ibrahim Gobir (Sokoto East-Senate Leader) and was tagged on the Central Bank of Nigeria Act (Amendment) BILL, 2023 (SB. 1125).

He said, “Mr President, my respected colleagues, permit me to lead the debate on this Bill which seeks to amend the Central Bank of Nigeria (CBN) Act to increase the total CBN advances to the Federal Government from five per cent to a maximum of 15 per cent (15%).

“The Bill was read for the first time in this Chamber on Wednesday, May 24, 2023.

“This amendment is very consequential, and it needs the support of us all. This is to enable the Federal Government to embark on very important projects that will inflate and rejig the economy.

“I, therefore, urge you all to support the passage of this bill.”

The PUNCH reports that the Senate recently approved the request of the President, Major-General Muhammadu Buhari (Retd.), to restructure the N22.7 trillion loan from the CBN extended to the Federal Government under its Ways and Means provision.

(Punch)