Senate Holds Emergency Session, Amends CBN Act, Extends Implementation of 2022 Supplementary Budget to Dec 2023

*Hikes advances to FG from 5% to 15% 

Sunday Aborisade in Abuja

The Senate held an emergency session on Saturday and passed a bill which seeks to amend the Act which established the Central Bank of Nigeria.

The Red Chamber also passed another legislation which seeks to extend the implementation of the 2022 Supplementary Budget by Six Months.

Both bills were sponsored by the Senate Leader, Ibrahim Gobir (Sokoto East)

They were titled, ” A Bill for an Act to Amend the 2022 Supplementary Appropriation Act and for other matters connected therewith, 2023 (SB. 1124)” and  

” A Bill for an Act to Amend the Central Bank of Nigeria Act C4 Laws of the Federation of Nigeria 2004 and  for Other Matters Connected Thereto, 2023 (SB. 1125)”

 The Senate Leader in his lead debate explained that the bill which seeks to amend the 2022 Supplementary Appropriation Act would  extend the implementation year from the 30th June 2023 to 31st December 2023. 

Gobir  recalled that the National Assembly extended the implementation of the 2022 Supplementary Appropriation Act from 31st December 2022 to 31st March, 2023.

He said, ” This was to allow full implementation of  the budget, especially in light of the 2022 Supplementary budget approved in December 2022.

“The extension had allowed MDA’s to utilize a large proportion of funds released to them. However, significant amounts of funds remain with Ministries Department and Agencies (MDAs) and will require a further extension to be fully expended. 

“Given the critical importance of some key projects nearing completion, requesting a further extension of the expiration clause in 2022 Supplementary Appropriation Bill and the Long Title and Explanatory Memorandum is expedient.

“This is to avoid compounding the problem of abandoned projects, given that some of the projects were not provided for in the 2023 Budget.”

Gobir therefore urged his colleagues to give their full support to the Bill to allow full utilization of the Capital releases in order to help reflate the economy.

The Senate passed the bill after the clause-by-clause consideration at the Committee on Supply.

While also leading the debate on the CBN Amendment Act, the Senate Leader said the Bill seeks to amend the Central Bank of Nigeria (CBN) Act regarding the Ways and Means Advances policy.

The amendment specifically seeks to increase the total CBN advances to Federal Government from five percent (5%) to a Maximum of fifteen percent (15%). 

Gobir said, “The very essence of this Bill is to enable the Federal Government to meet its immediate and future obligation in the approval of the ways and means by the National Assembly and advances to the Federal Government by the Central Bank of Nigeria.

“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.”

The CBN Act allows  the CBN to grant temporary advances to the federal government in respect of temporary deficit of budget revenue at such rate as the bank may determine. 

It however says the total amount of such advances outstanding “shall not at any time exceed five (5) percent of the previous year’s actual revenue of the Federal Government.”

In addition, it stipulates that, “All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted.

If such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid.

Specifically, Section 38 of the CBN Act states: “Notwithstanding the provisions of the section 34(d) of this Act, the Bank (CBN) may grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue at such rate as the Bank may determine. 

“The total amount of such advances outstanding shall not at any time exceed five (5) percent of the previous year’s actual revenue of the Federal Government.”