CBN loan: Senate boils over Buhari’s N22.7trn

•Asks CBN to extend deadline on new notes withdrawal to June

BY GODDY OBINWA

The Senate was thrown into turmoil, yesterday, following President Muhammadu Buhari’s bid to get the National Assembly to legitimise or  restructure  the N22.7 trillion obtained by the Federal Government as ‘Ways and Means’ from the Central Bank of Nigeria (CBN).

Attempts by the senate leadership to get the report of its Finance Committee, which had recommended that the president’s request be granted, was quickly rebuffed by the lawmakers at plenary.

Senator George Thompson Sekibo was the first to raise a constitutional point of order to explain why the ‘Ways and Means’ advances were illegal and unconstitutional. 

He informed the Senate that the action of the president was in breach of the CBN Act, Senate standing rules, and attacked the privileges of the Senate and National Assembly. 

Senate President, Ahmad Lawan’s several attempts to get the lawmakers accede to the president’s request hit the rocks as the majority agreed with the depth of information and argument adduced by Sekibo. 

He said: “We came into this Chamber today and we were given the report of N22.7 trillion which has been spent in the past 10 years. Whether it is 10 years or five years, whatever it is, the issue is that when the loans are taken the Senate should be informed. We should be abreast with the information that such money is going to be taken because it is being taken on behalf of the people of Nigeria and we are entrusted with the power to make laws. According to the constitution we can appropriate. They brought this without details for us to approve.”

Sekibo said what the president had done was asking the Senate to approve what was in clear violation of sections 80, 83, Section 1,13(1), section 38, of the CBN Act as well as Section 80 of the 1999 constitution as amended

Said Sekibo: “The constitution states that ‘no money shall be withdrawn from the consolidated revenue fund of the Federation except to meet expenditure that is charged upon the fund or where the issue of those monies have been authorised by an appropriation act, supplementary act or an act passed in pursuance of section 81 of the constitution. No money shall be withdrawn from any account other than the consolidated revenue fund of the Federation unless the issue of those monies have been authorized by the act of the National Assembly. Section 80 (4) states that no money shall be withdrawn from the consolidated revenue fund or any other fund of the Federation except by the approval of the National Assembly, except in the manner prescribed by the National Assembly.”

The uproar that ensued in the chambers led to the abrupt halt of consideration of the matter. The Senate letter went into closed door session and after an hour of exchanges, the leadership of the Senate agreed that the President’s request be stepped down pending the provision of detailed explanation on the request. 

Senators Betti Apiafi, Lillian Ekwunife, Mohammed Ndume, Abdullahi Yahaya, were among the lawmakers who led the opposition to the president’s request. 

Buhari had last week written  to the Senate seeking approval for the restructuring of N22.7 trillion ‘Ways and Means’ advances taken by the Federal government from the CBN.

The ‘Ways and Means’ are advances from the Central Bank of Nigeria to the federal government for emergency funding of delayed receipt of fiscal deficit.

The president in the letter had said: “The Ways and Means advances by the Central Bank of Nigeria to the Federal Government has been a funding option to the Federal Government to cater for short term or emergency finance to fund delayed government expected cash receipt of physical deficit. The Ways and Means balances as at 19th December 2022 is 22.7 trillion. I have approved the securitisation of the Ways and Means balances along the following terms: Amount,N23 .7 trillion; tenure, 40 years; moratorium on principal repayment, three years and pricing interest rate nine per cent. 9%. Your concurrence and approval is sought to allow for the implementation of same.” 

However, the N1 trillion part of the ways and means from where the N819.5 billion was to be funded was approved.

Meanwhile, et Senate, yesterday, passed the N819, 536,937,813 2022 supplementary bill which was requested for approval by President Muhammadu Buhari last week

The president, barely 10 days to end of 2022, had asked the Senate to approve the N819.5 billion supplementary budget for the 2022 fiscal year to fix infrastructure destroyed by the flood disaster that ravaged the country recently.

Also, the Senate, yesterday, urged the Central Bank of Nigeria (CBN) to extend the date of withdrawal of old currency notes from circulation from January 31 to June 30, 2023.

The resolution of the Senate was sequel to a motion titled, ” Urgent need to extend the withdrawal of old currency from circulation” and sponsored by Ali Ndume. 

Ndume who noted that the timing of the policy was wrong, said since the beginning of the implementation of the cash withdrawal limit, the new notes are not in circulation even in cities. 

Ndume said: “Many Nigerian banks on Thursday 15th December 2022 open their vault to customers and depositors to exchange their old naira notes for the newly redesigned currency, which has a stipulated deadline of January 31, 2023.

“Nigerians are already envisaging rush and long queues in the banking hall across the country as a result of people trying to get access to the new naira note, which was unveiled last month by President Mohammad Buhari at a brief ceremony at the state house, Abuja.

“The old notes are expected to be in circulation alongside the new ones until January 31, 2023, when the old notes are expected to be phased out, it is expected that many Nigerian businesses would start to reject the old notes as soon as the banks start paying out the redesigned notes to customers.”

“Access to the new notes may be compounded by the recent circular by the CBN, which limit the amount of cash individuals and corporate entities could withdraw within a certain period of time. For instance, the CBN said individuals could only withdraw N100, 000 per week while corporate could only have access to N500, 000 per week through over-the-counter (OTC) transactions;

“Observes that access to large quantities of cash above the limit would attract processing fees of 5% and 10% for individuals and corporate entities respectively. Large withdrawals are also subjected to scrutiny by the regulator to determine the importance and usage of such cash.

“Convinced that if the withdrawal of old notes from circulation is not extended beyond 31st January many Nigerian will be thrown into hardship and to avoid a repeat of 1984 experience withdrawal of old notes.”

ADVERTISEMENTS

This image has an empty alt attribute; its file name is AquaMal-2-3.jpg
This image has an empty alt attribute; its file name is Mozida-suites-ok-14.jpg
This image has an empty alt attribute; its file name is IMG_20210912_013137_886-e1631406908327.jpg
This image has an empty alt attribute; its file name is Nigerian-Shippers-Council-adv-12.gif
This image has an empty alt attribute; its file name is image307993.jpg
This image has an empty alt attribute; its file name is IMUNACE-1024x582.jpg
This image has an empty alt attribute; its file name is IMG_20220602_080819_9652_1-1-987x1024.jpg
This image has an empty alt attribute; its file name is ABBEY-COURT-11.jpg
This image has an empty alt attribute; its file name is Pythrocin-1.jpg
This image has an empty alt attribute; its file name is Pinnacle-Aquacef-7.jpg
This image has an empty alt attribute; its file name is Pinnacle-Cafelexin-9.jpg
This image has an empty alt attribute; its file name is OPERATION-TIKPOO-RADIO-MSG-TIME.jpg
This image has an empty alt attribute; its file name is image307993-1.jpg
This image has an empty alt attribute; its file name is NPA-LOGO-2.png
This image has an empty alt attribute; its file name is BUA-Cement-Advert.-2.png

Leave a Reply

Your email address will not be published. Required fields are marked *