Key Highlights
- After initial delays, the House of Representatives approved President Buhari’s request to restructure the N23.7 trillion loan obtained from the CBN 24 hours after the Senate did the same.
- The report was presented on the floor of the House by the Joint House Committee on Finance; Banking and Currency; and Aids, Loans and Debt Management.
- The House approved the securitization of the N23.7 trillion loan for a tenor of 40 years with a moratorium on principal repayment for 3 years and at an interest rate of 9% per annum.
The House of Representatives on Thursday approved President Muhammadu Buhari’s request to restructure the N23.7 trillion loan obtained by the Federal Government from the Central Bank of Nigeria (CBN) through the ways and means advances.
In what appeared like a U-turn, the House of Representatives finally gave its nod to the president’s request which he made to the National Assembly in December 2022, and was abandoned by the lawmakers.
The approval from the lower chamber of the National Assembly is coming barely 24 hours after their counterpart in the senate granted a similar request from the president despite some opposition.
Joint House Committee presents report
However, the Joint House Committee on Finance; Banking and Currency; and Aids, Loans and Debt Management, on Thursday, laid its report on the request, which the lawmakers considered and approved during plenary.
The committee recommended that the House “approve the requested additional N1 trillion Ways and Means Advances for implementing the 2022 Supplementary Appropriation Act as passed by the National Assembly.
It also approved the securitization of the total outstanding Ways and Means amount under the following terms: Amount N23,719,703,774,306.90; tenor, 40 years; moratorium on principal repayment, 3 years; pricing/interest rate, 9 percent per annum.
The joint committee in its presentation to the committee of the whole said,
- “That the House do consider the Report of the Committees on Finance, Banking and Currency and Aids, Loans and Debt Management on the Restructuring of Ways and Means Advances and approve the recommendations therein (Laid: 2/5/2023), approve the requested additional N1 trillion Ways and Means advances for the implementation of the 2022 Supplementary Appropriation Act as passed by the National Assembly.
- “Approve the securitization of the total outstanding Ways and Means amount under the following terms: amount N23,719,703,774,306.90, Tenor 40 years; Moratorium on Principal Repayment 3 years, pricing/Interest Rate 9 percent per annum.”
In case you missed it
- President Muhammadu Buhari had in a letter to both chambers of the National Assembly in December 2022, requested for the approval to restructure N23.7 trillion ways and means advances.
- The Ways and Means provision allows the Federal Government to borrow from the CBN if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
- The Senate President, Ahmad Lawan; and Speaker of the House of Representatives, Femi Gbajabiamila, read out Buhari’s request to members of the respective chambers on December 21.
- In the request titled ‘Restructuring of Ways and Means Advances,’ the President wrote, “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 fiscal deficit.
- “The Ways and Means balances as of December 19, 2022, is N23,719,703,774,306.90
- “I have approved the securitization of the Ways and Means balances along the following terms: amount, N23.7tn; tenure, 40 years; moratorium on principal repayment, 3 years; pricing interest rate, 9 percent.
- “Your concurrence and approval is sought to allow for the implementation of the same.”
- Gbajabiamila had referred the request to the House Committee on Aids, Loans and Debt Management, while Lawan sent it to the Senate Committee on Finance.
- However, the House, on January 31, 2023, partly approved of the requests made by the President by approving the restructuring of N1 trillion Ways and Means Advances and dropping the request for N22,719,703,774,306.90 from the CBN for “further engagement with the Executive by the joint committee to allow for thorough and detailed work and submissions on the larger part of the advances.