…delays decision on Buhari’s request to restructure N23.7trn CBN overdrafts
The Nigerian Senate on Wednesday passed the federal budget for the 2023 fiscal year after raising it by over N1.3 trillion to N21.8 trillion, a 6.4 percent increase from N20.5 trillion presented by President Muhammadu Buhari in October.
The Senate also increased the oil benchmark price to $75 from $70. It further pegged Nigeria’s oil production at 1.69 million barrels per day (bpd) and the exchange rate at N435/dollar.
The budget, tagged “Budget of Fiscal Sustainability and Transition”, was passed after the Senate considered the report of its Committee on Appropriation presented by the committee chairman, Barau Jibrin.
Jibrin, in his presentation, recommended that about N967.4 billion be approved for Statutory Transfers – a category into which the National Assembly budget falls.
A breakdown of the budget as passed by the Senate shows that debt service will gulp approximately N6.6 trillion (N6,557,597,611,797), statutory transfer N967.5 billion (N967,486,010,536), recurrent (non-debt) expenditure N8.3 trillion (N8,329,370,195,637), while capital expenditure will take approximately N6 trillion (N5,972,734,929,421).
Jibrin also explained that the committee observed the need for stimulation of the economy through increased capital expenditure, which would make for infrastructural development.
The Senate, thereafter, dissolved into the Committee of Supply, which considered and passed the budget.
Senate President Ahmad Lawan, in his remarks, commended his colleagues for restoring the budget cycle to January to December, noting that the 2023 budget is the fourth and final budget to be passed by the ninth Senate.
He urged the executive to ensure the total implementation of the 2022 supplementary budget, which was also passed by the Senate on Wednesday.
Now that the National Assembly has passed the budget, it will require the president’s assent to become law.
Meanwhile, the Senate could not reach a decision on Buhari’s request to convert the Central Bank of Nigeria’s N23.7 trillion Ways and Means Advances to his administration to long-term bonds.
Buhari had, in a letter dated December 20, requested the lawmakers to approve the conversion of N23.7 trillion worth of CBN overdrafts to his government to 40-year bonds at 9 percent interest, including an extra N1 trillion loan to the government from the apex bank.
In the request titled “Restructuring of Ways and Means Advances”, Buhari said the Ways and Means Advance by the CBN to the Federal Government had been a funding option to the government to cater for short-term or emergency finance to fund delayed government expected cash receipt of fiscal deficit.
“The Ways and Means balance 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, three years; pricing interest rate, nine per cent,” the president wrote.
However, some lawmakers on Wednesday questioned the plan, arguing that the loan conversion was unconstitutional.
The ensuing argument threw the Senate into a rowdy session, prompting Senate President Lawan to suspend a vote on the proposal until a later date.
