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From Fred Itua, Abuja
The Senate on Wednesday, increased the total advances the Central Bank of Nigeria (CBN) can grant to the Federal Government from five to 10 per cent.
It speedily amended the CBN Act to allow the Federal Government get 10 per cent as against the former five per cent.
The original initial request by the sponsor of the Bill and leader, Opeyemi Bamidele, was that advances from the CBN to the Federal Government be raised to 15 per cent.
Leading the brief debate on the bill, Bamidele said: “The very essence of this Bill my 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.”
Bamidele explained that advances from the CBN to the Federal Government are essentially loans that the apex bank 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.”
According to the Senate leader, the passage and enactment of this amendment into law will provide immediate funds to address budget shortfalls and finance essential government expenditure.
He said it also helps to maintain financial market stability by preventing government default on its obligation.
Bamidele further stated that the increase from 5 to 10 per cent will inject money into the economy, stimulate economic activity and potentially create jobs.
“It enables the government to support critical sectors like agriculture, health care and infrastructural development; and lower the government borrowing cost by providing cheaper funds that 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 Renewal Hope Infrastructural Development across the country,” he stressed.
