AFRICA

National Assembly Approves CBN Act Amendment, Raises Ways and Means Threshold to 10%

The National Assembly, on Wednesday, passed an amendment to the Central Bank of Nigeria (CBN) Act, which increased the apex bank’s threshold of Ways and Means Advances to the federal government from five per cent to a maximum of 10 per cent.

However, in the House of Representatives, opposition lawmakers, on Wednesday, staged a walkout following the decision of the House to approve the amendment to the CBN Act to increase the Ways and Means advances.

Similarly, on Wednesday, the senate rescinded its decision on the amendments it made to the 2024 Appropriation Act by repealing and re-enacting the law.

Senate Leader, Opeyemi Bamidele, led the debate on the amendment to the CBN Act in the red chamber.

CBN governor, Olayemi Cardoso, had said the apex bank would no longer give Ways and Means to the president until the previous loans were repaid.

But speaking on the bill, Bamidele said, “Permit me to lead the debate on this bill, which seeks to amend the CBN Act to increase the total CBN advances to federal government.

“The bill was read for the first time in this chamber on Wednesday, 31st July, 2024.

“The very essence of this bill is to enable the federal government meet its immediate and future obligation due to the government increasing needs for funds to finance the budget deficits and other expenses.

“The Central Bank of Nigeria’s advances to the federal government are essentially loans that the Central Bank of Nigeria provides to the government to help it meet its financial obligations.

“These advances are typically short-term and are expected to be repaid by the government. The passage and enactment of this amendment into law will provide immediate funds to address budget shortfalls and finance essential government expenditure.

“It will also help to maintain financial market stability by preventing government default on its obligation.

“Government would be able to inject money into the economy, stimulating economic activity and potentially creating jobs.”

The senator added, “It will enable the government to support critical sectors like agriculture, health care and infrastructural development

“It will lower the government borrowing cost by providing cheaper funds than the traditional borrowing method.

“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, especially the Renewed Hope Infrastructural Development across the country.”

Senators Adetokunbo Abiru, Babangida Hussaini, Aliyu Wadada, Adams Oshiomhole, Ibrahim Dankwambo, and Solomon Adeola supported the proposed legislation.

After the debate, the senate approved that the bill be read for the third time and passed when its clauses were put to voice vote by Senate President Godswill Akpabio.

The House of Representatives also followed a similar process and passed it for first, second and third reading during the emergency plenary.

The House increased the limit to 10 per cent at an emergency plenary presided by the Speaker, Abbas Tajudeen, during the consideration of a bill titled, “A Bill for an Act to Amend the Central Bank of Nigeria Act, to increase the Central Bank of Nigeria’s total advances to the federal government from five per cent to a maximum of 15 per cent and far related matters.”

As is the tradition, the House had dissolved into Committee of the Whole to consider the report on the bill, with Deputy Speaker, Benjamin Kalu, as the chairman.

During the debate, Minority Leader of the House, Kingsley Chinda, was of the opinion that the loan limit be reduced to two per cent to ensure accountability and transparency.

However, Chairman of the House Committee on Finance, James Faleke, quickly interjected, insisting that the present five per cent was not enough for the government to rely on.

According to Faleke, “What we are doing is for the survival of the economy. We need to move away from what we are now to 15 per cent. Bringing down the rate to two per cent isn’t what will bring transparency.”

In his submission, Hon. Isiaka Ayokunle said the limit should be increased to 10 per cent, saying it would ensure the managers of the economy serve with caution.

On his part, a former Deputy Speaker Idris Wase, approved Ayokunle’s suggestion that it should be raised to 10 per cent.

After the debate, Kalu put the motion amending the bill to reflect 10 per cent to a voice vote.

While the “Nays” had it, Kalu ruled in favour of the “Ayes”.

It was at this point that some opposition members staged a walkout to register their displeasure, despite pleas by the deputy speaker that the increase was also to allow the government to fund the new N70,000 minimum wage.

Kalu said, “The money for the increment has to come from somewhere. We know how the Ministry of Finance and others are working. Those who said 15 per cent said it is too high. This is within industry taxes. It is all for the welfare of this country.”

Meanwhile, the National Assembly on Wednesday, rescinded its decision on the amendments it made to the 2024 Appropriation Act by repealing and re-enacting the law.

The exercise was aimed at repealing and re-enacting the 2024 Appropriation Act to fully incorporate the N6.2 trillion, which President Bola Tinubu had requested the National Assembly to add to the current budget.

Tinubu had through a letter dated July 23, said the money would enable his government fund legacy capital projects and pay the new national minimum mage of N70,000 for workers.

The addition had raised the size of the 2024 budget from N28.7 trillion to N35.055 trillion.

The National Assembly had passed the addition as an “amendment” to the 2024 budget.

The term did not properly capture the decision of the lawmakers.

During Wednesday’s emergency plenary, the Senate and the House of Representatives repealed the 2024 Appropriation Act and re-enacted it with the title: “2024 Appropriation Act (Repeal and Re-enactment) Bill.”

They amended their rules and passed it for first, second and third readings. The two chambers captured N35.055 trillion as the Appropriation Act for 2024.

The repeal and re-enactment followed a motion moved by Leader of the Senate, Bamidele (APC, Ekiti-Central) and Chairman of the House Committee on Rules and Business, Hon. Francis Waive.

The motion for rescission in both the Senate and House admitted that the Appropriation Act (Amendment) Bill, 2024 was passed on Tuesday 23 July, 2024.

It also noted that in the course of cleaning the bill, the Directorate of Legal Services observed some legal issues that required reconsideration.

The motion said Clauses 13 and 14 of the bill as well as the long title and Explanatory Memorandum needed to be amended to reflect the intent of the Appropriation Act

It stressed the need to rescind the House decision on the Long Title, Explanatory Memorandum and Clauses 13 and 14 of the bill

The federal legislature resolved to rescind the decision on the Long Title, Explanatory Memorandum and clauses 13 and 14 of the bill and commit the same provisions to the Committee of Supply for reconsideration.

A breakdown showed that N1.7 trillion was retained for statutory transfers; N8.2 trillion for Debt Service; N11.2 trillion for Recurrent Expenditure and N13.7 trillion for contribution to the development fund for capital projects of the federation (capital budget).

A member of the House and Chairman of the House Committee on Defence, Hon. Babajimi Benson, stated that amendment to the Appropriation Act would not in any way affect the implementation of the budget.

He said the amendment was just crossing the right ‘i’s and dotting the right ‘t’s adding that the amendment does not in any way affect the figures in the budget.

 Sunday Aborisade and Adedayo Akinwale

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