With about 10 days to the close of the year, President Muhammadu Buhari on Wednesday is seeking the approval of the National Assembly to borrow an additional N819.5 billion to finance the 2022 supplementary budget.
In a letter sent to the Senate and House of Representatives, and read during plenary by the Senate President, Ahmad Lawan, and Speaker, House of Representatives, Femi Gbajabiamila, the President explained that the loan is to address various infrastructure that were destroyed by floods in many states of the country, and to complete major roads that are at 85% completion.
The letter reads: “The year 2022 has witnessed the worst flood incident in recent history which has caused massive destruction of farmlands at a point already closed to harvest season.
“This may compound the situation of food security and nutrition in the country. The flood has also devastated road infrastructure across the 36 states and the FCT as well as bridges nationwide that are critical for the movement of goods and services.
“The water sector was equally affected by the flood and there is a need to complete some ongoing critical projects that have already achieved about 85 per cent completion.
“The nine critical projects proposed in the sector cut across water supply, dam projects and irrigation projects nationwide.
“I have approved a supplementary budget of 2022 appropriation of N819.536 billion, all of which are capital expenditures.
“The supplementary will be financed through additional domestic borrowings which will raise the budget deficit for 2022 to N8.17 trillion and deficit-to-GDP ratio to 4.43%.”
In another letter titled: “Restructuring of Ways and Means Advances,” President Buhari also informed the lawmakers of the government’s intention to restructure about N23.18 trillion borrowed from the Central Bank of Nigeria (CBN) through ways and means.
Ways and Means are advances from the CBN to the federal government for emergency funding of delayed receipt of fiscal deficit.
The letter reads in part, “The ways and means advanced 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 physical deficit.
“The ways and means, balances as of 19th December 2022 is N23,719,703,774,306.90.
“I have approved the securitization of the ways and means balances along the following terms ÷ Amount N23 .7 trillion.
Tenure 40 years, Moratorium on principal repayment, three years, pricing interest rate 9%,
“Your concurrence and approval is sought to allow for the implementation of same.”
The two letters were subsequently referred to the Committees on Finance, Banking and Currency, Loans, Aid and Grant, Agriculture, and are expected to be considered and passed during plenary on Thursday.
Senate President said: “We are referring these letters to our committees on Appropriation, Finance, Works, Agriculture, and Water Resources today.
“They have to work on it and ensure that we follow the due processes. In that respect, the Minister of Finance, the CBN, the Ministers of Agriculture, Water Resources, and Works are to be invited and make themselves available for this process and to ensure that we get the right information between today and tomorrow.
“Tomorrow by the grace of God, will be the last legislative day for the 9th Senate this year. It will be quite busy for us because we have to receive the report of the 2023 Appropriation Bill from our Committee on Appropriations.
“We will also receive the report on the Finance Bill, 2022, from our Committee on Finance. We will also receive the report from the Appropriation Committee on the two letters that I have just read.”