Senate Turns Down President Buhari’s Request To Restructure N22.7 Trillion Loan

The Senate has rejected President Muhammadu Buhari's request to restructure the N22.7 trillion Ways and Means loans extended to the federal government by the Central Bank of Nigeria (CBN).

The lawmakers, Wednesday, rejected the request after a heated debate in the Senate over the issue.

President Buhari, last week, requested a restructuring of the N22.7tn ways and means advances collected from the CBN over the last ten years, as well as a fresh domestic loan of N1tn, Punch Reported.

This includes raising the amount to N23.7trn with a tenor of 40 years, three years moratorium on repayment, and an interest rate of 9 percent.

The Ways and Means provision is a mechanism that allows the government to borrow money from the central bank if it needs short-term or emergency financing to cover expected cash delays in government receipts or fiscal deficits.

The government has relied heavily on the central bank to finance its expenditure programs via Ways and Means, due to a shortfall in revenue. However, the provisions in the act cap monetary financing of fiscal deficits at 5% of the prior year's revenues.

This caused an uproar in the red chamber when the finance committee was considering a report on the presidential request.

Senator Betty Apiafy (PDP, Rivers) raised a point of order that the "ways and means" were not known to Nigerian law to finance government fiscal deficits.

Senator Thompson Sekibo (PDP, Rivers) rejected the request citing constitutional provisions and Section 38 of the CBN Act.

"Section 38 of the CBN Act states that any money collected by the federal government as a loan or emergency fund in form of Ways and Means advances must be refunded before collection of another," said Sekibo, as per The Nation.

"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," he added.

After careful deliberation, the Senate decided to put the restructuring of N22.7 trillion CBN loans on hold but has approved the borrowing of N819.5bn to finance the 2022 supplementary budget.