On Wednesday, the Senate approved a bill to increase the percentage of Ways and Means loans the Central Bank of Nigeria (CBN) can extend to the Federal Government.
The Nigerian Senate raised the credit facility available from the apex bank to the Federal Government from 5% to 10%.
Known as Ways and Means, these loans provide short-term financing to the Federal Government to address budget shortfalls.
To implement this, the Senate amended the CBN Act to increase the total CBN advances (loans) available to the Federal Government.
The bill to amend the CBN Act was considered during the plenary session on Wednesday and was read for the first time.
Senate Leader Opeyemi Bamidele stated that the executive bill aims to enable the Federal Government to meet its immediate and future obligations due to increasing financial needs to cover budget deficits and other expenses.
He explained that the loans would provide immediate funds to address budget shortfalls, finance essential government expenditures, and help maintain financial market stability by preventing government default on its obligations.
Bamidele added that these loans, when injected into the economy, would stimulate economic activity, potentially create jobs, and support critical sectors like agriculture, healthcare, and infrastructure development.
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