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Wednesday, December 4, 2024

Senators react as Senate overhauls CBN Act, allowing extensive borrowings

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In a surprising turn of events, the Nigerian Senate held an emergency session to make significant amendments to the Central Bank of Nigeria (CBN) Act, resulting in a heated debate among the senators. The amendments aimed to create more room for borrowings, raising eyebrows and concerns among lawmakers and citizens alike. This captivating tale unveils the intricacies of the amendments, shedding light on the potential consequences for the nation’s economy.

The Senate made a bold move by increasing the government’s financial borrowing from the CBN by a staggering 200%. This decision immediately raised questions about the implications of such a substantial leap in borrowing capacity.

In addition to increasing borrowings, the Senate raised the ceiling for CBN advances to the Federal Government. The threshold was lifted from 5% to a maximum of 15%, allowing the government more leeway in securing advances from the CBN.

Alongside the amendments, the Senate also extended the implementation period of the 2022 Supplementary Appropriation Act. This extension would give government agencies ample time to utilize the funds allocated for various critical capital projects within the fiscal year, pushing the deadline from June 30, 2023, to December 31, 2023. Notably, the supplementary budget would be financed by additional domestic borrowings, as indicated by President Buhari.

While some senators rallied behind the amendments, others voiced their reservations. Senator Babba Kaita (PDP, Katsina) questioned the urgency of the amendments and suggested that they be left for the incoming assembly to address. Senator Gabriel Suswam (PDP, Benue) echoed concerns about the potential negative effects of excessive borrowing on the economy.

The amendments to the CBN Act and the extension of the supplementary budget implementation have stirred a storm of controversy and debate within the Senate. As the repercussions of these decisions unfold, the Nigerian economy stands at a critical juncture. Stay tuned to witness the impact and implications of these extraordinary legislative actions.

 

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