Ways and Means: Tinubu’s request for amendment of CBN Act fuels speculation

Barely five days after the assurance given by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun that the federal government would not need to seek cash advances from the Central Bank of Nigeria to meet its cash call obligations, indication has emerged that the Bola Ahmed Tinubu administration may approach the apex bank for financial succour.

An Executive Bill seeking for an amendment of the CBN Act to increase grant to the Federal Government from the CBN, through Ways and Means from five to fifteen percent was read on the floor of the Red Chamber on Wednesday.

Nigerian Tribune checks revealed that the Finance Minister told journalists last Friday that the Bola Ahmed Tinubu administration would not rely on Ways and Means to fund external debt service or other liabilities.

He said: “I can say quite categorically that under President Bola Tinubu, the federal government does not rely on ways and means to fund itself,” Edun said.

“At no time have we gone to Mr. President and requested permission to seek funding from Central Bank to pay anybody, be it external debt service, be it share capital cash calls or any other of the liabilities that the government has.

“As we have all agencies, we are focused on ensuring that the revenue that is due to the federal government is collected robustly, using technology to avoid the blockages, which manual processing can cause and it has led to a very robust revenue effort and likewise, we are implementing expenditure controls, also very ably empowered by technology.”

Further checks revealed that the present administration inherited a legacy of N22.7 trillion in outstanding ways and means from the Muhammadu Buhari administration.
Before the Senate increased the total advances the apex bank could grant to the Federal Government from five to 10 per cent, the Leader of the Senate, Senator Opeyemi Bamidele while reading the Executive Bill from President Tinubu disclosed that advances from CBN to the Federal Government be raised to 15 per cent.

He said in his Lead Debate that “The very essence of this Bill may is to enable the Federal Government to meet its immediate and future obligation due to the government increasing needs for funds to finance the budget deficits and other expenses.”

The Senate Leader submitted that “advances from the CBN to the federal government are essentially loans that the CBN 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.”

He noted that the expeditious passage and enactment of the amendment into law will provide immediate funds to address budget shortfalls and finance essential government expenditures;

He maintained that it would also help to maintain financial market stability by preventing government default on its obligation.

Bamidele further stated that the increase from 5 to 10 percent would 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 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 Renewal Hope Infrastructural Development across the country.”