The Nigerian Senate has passed a bill to increase the percentage of loans the Central Bank of Nigeria can give to the Federal Government from 5% to 10%.
The bill, which amends the CBN Act, aims to provide more short-term financing to the government to cover budget shortfalls.
Senate Leader Opeyemi Bamidele explained the rationale behind the increase, saying: “The executive bill is to enable the Federal Government to meet its immediate and future obligations due to the government’s increasing needs for funds to finance the budget deficits and other expenses.”
He added: “The loans will enable the provision of immediate funds to address budget shortfalls and finance essential government expenditures as well as help maintain financial market stability by preventing government default on its obligation.”
Bamidele also highlighted the potential benefits of the increased loans, stating: “The increased funds will stimulate economic activity, potentially create jobs, and support critical sectors like agriculture, healthcare, and infrastructure.”
He noted that the loans will be cheaper than traditional borrowing methods, lowering the government’s borrowing costs.
The Senate emphasized the need for proper monitoring of capital projects to ensure that the funds are used for infrastructure and legacy projects. After a thorough review, the bill passed its third reading and is now awaiting President Bola Tinubu’s signature to become law.
