On Wednesday, the Senate and the House of Representatives passed a bill to double the percentage of Ways and Means loans the Central Bank of Nigeria (CBN) can extend to the Federal Government. The bill, which raises the credit facility from 5% to 10%, aims to address budget shortfalls and stimulate economic activity.

The Ways and Means provision allows the CBN to provide short-term financing to the Federal Government to cover budget deficits. The amendment to the CBN Act, which was considered at the Senate plenary on Wednesday, was read for the first time and swiftly passed through the necessary legislative processes.

Senate Leader Opeyemi Bamidele explained that the executive bill enables the Federal Government to meet its immediate and future financial obligations. The increasing need for funds to finance budget deficits and other essential government expenditures prompted the proposed amendment.

Bamidele emphasized that the loans would provide immediate funds to address budget shortfalls, finance critical government expenditures, and maintain financial market stability by preventing government default on its obligations. He added that injecting these loans into the economy would stimulate economic activity, potentially create jobs, and support vital sectors such as agriculture, healthcare, and infrastructure development.

Additionally, Bamidele argued that the increased loan margin would lower the government’s borrowing costs by providing cheaper funds compared to traditional borrowing methods. He stressed the importance of adequate monitoring of capital projects to ensure that the funds are used solely for infrastructure and legacy projects.

After consideration in the Committee of the Whole, the executive bill scaled the third reading and was passed by the Senate. Similarly, the House of Representatives amended the CBN Act to raise the Ways and Means provision from 5% to 10%.

President Bola Tinubu is expected to sign the amended bill into law, marking a significant step in the Federal Government’s efforts to manage its budget and stimulate economic growth.