Senate Passes Buhari’s Request of N23.7tn Ways and Means Advances Loan Conversion

The Senate has approved the request of President Muhammadu Buhari for the  restructuring of the sum of N23. 719 trillion Ways and Means advances that were made to ensure that the government was not shut down.

The Red Chamber has also  approved the sum of N180,463,062,187 million  being the balance of the supplementary budget and the interest accrued on the Ways and Means Advances.

The approved sum was what had been spent by the executive arm of government without appropriation by the National Assembly.

However, the upper legislative chamber said that if there was a need to exceed the 5% threshold of the prior year’s revenue, recourse must be made to the National Assembly for approval.

The Senate approved the president’s request after the presentation for consideration of the report by the Senate Leader and Chairman, Senate Special Committee on Ways and Means, Senator Ibrahim Gobir, APC, Sokoto East. Ways and Means are loans or advances given by the Central Bank of Nigeria to the Federal Government to enable it to cater for short term or emergency finance to fund delayed government expected cash receipt of deficit.

Gobir, in his presentation, said some of the beneficiaries of the funds are the office of the accountant-general of the federation, ministry of foreign affairs (ECOWAS national unit), Nigeria Bulk Electricity Trading, Azura Power West Africa, Niger Delta Power Holding Company, and Accugas Limited.

The approval was after a forced closed door session. that lasted one hour  by the Senators and called by the President of the Senate, Senator Ahmad Lawan, apparently to cool the nerves of aggrieved lawmakers who had vehemently opposed the earlier passage in January. The Ways and Means report slated for consideration on Tuesday  was dropped, even as the matter was not slated in yesterday’s Order Paper before it was finally  considered and approved by the Senators. President Muhammadu Buhari had in separate letters to both the Senate and the House of Representatives  on December 21, 2022, sought for approval of restructuring of N22.7trillion Ways and Means. The President in a letter read by Senate President Ahmad Lawan during Plenary session had explained that Ways and Means are advances from the Central Bank of Nigeria to the federal government for emergency  funding of delayed receipt of fiscal deficit .

According to him,  the ways and means balances as at 19th December 2022  was  22.7 trillion, even as President Buhari further stated in the letter that he has approved the securitisation of the ways and means balances along the following terms :Amount. N23 .7 trillion , Tenure  40years , Moratorium on principal repayment , three years , Pricing interest rate 9% .

President Buhari in the  letter noted that Ways and Means are advances from the Central Bank of Nigeria to the federal government for emergency  funding of delayed receipt of fiscal deficits,  said; “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 physical deficit.