Pres. Buhari’s Request To Restructure CBN Loan Suspended Again

The House of Representatives has stated that it will not restructure some of the loans obtained by President Muhammadu Buhari from the Central Bank of Nigeria (CBN) until more information has been provided.

President Buhari obtained the loan under the CBN’s ‘Ways and Means Advances’ which serves as a last resort credit for the Federal Government.

CBN had handed over N23.7 trillion loan to the federal government as total ‘Ways and Means Advances’, and the President is looking to restructure the credit into bonds to reduce the interest rate on the loan. 

Buhari had written to both the Senate and the House of Representatives in December 2022, stating that restructuring the loan will enable the government to repay the credit in bond for 40 years. 

“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 19th December, 2022, is N23,719,703,774,306.90 

“I have approved the securitisation 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 per cent. 

“Your concurrence and approval is sought to allow for the implementation of the same,” the President wrote in the letter to both legislative chambers.

However, one month later, a large part of the loan has not been restructured as the two legislative chambers have refused to give their backing. 

According to reports on Wednesday, the House of Representatives, during plenary on Tuesday 31, January, 2023, said the government and the CBN should provide more details before it gives the approval to restructure N22,719,703,774,306.90 out of the loan. 

The lower chamber, however, gave approval to Buhari to restructure N1 trillion after the Joint Committees on Finance; Banking and Currency; and Aids, Loans and Debts Management read out its finding which was later adopted by the lawmakers. 

The report which was laid down in the House of Representatives by Deputy Chairman of the House Committee on Finance, Musa Abdullahi, read: “Based on the observations and the exigencies of the Federal Government current fiscal situation, the committees Recommends the following: 

“(i) The approval of the requested restructuring of the N1 trillion additional Ways and Means Advances for implementation of the 2022 Supplementary Appropriations Act as passed by the National Assembly. 

“(ii) Further engagement with the executive by the Joint Committee to allow for a thorough and detailed work and submissions on the larger part of the advances, which amounts to N22,719,703,774,306.90 only.” 

This is the second time the lawmakers will suspend giving approval after the National Assembly postponed deliberation on the loan restructuring in December 2022.