The Senate on Wednesday passed a bill to increase the percentage of Ways and Means loans the Central Bank of Nigeria (CBN) can give to the Federal Government.

The upper chamber of the Nigerian legislature raised the credit facility obtainable by the Federal Government from the apex bank from 5% to 10%.

Known as the Ways and Means, the apex bank offers short-term financing to the Federal Government to cover its budget shortfalls.

To do this, the Senate amended the CBN Act to increase the total CBN advances (loans) to the Federal Government.

The bill for the amendment of the CBN Act was considered at plenary on Wednesday when it was read for the first time.

The Leader of the Senate, Opeyemi Bamidele said the executive bill read for the first time on Wednesday is to enable the Federal Government to meet its immediate and future obligations owing to the government’s increasing needs for funds to finance the budget deficits and other expenses.

He explained that the loans would 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 said the loans, when injected into the economy, will stimulate economic activity, potentially create jobs and enable the government to support critical sectors like agriculture, healthcare and infrastructural development.

He added that the loans will lower the government’s borrowing cost by providing cheaper funds than the traditional borrowing method.

Opeyemi and his colleagues argued that the margin of increase should be from 5 to 10 per cent.

They asserted that although the increase was necessary for economic development, adequate monitoring of capital projects should be enhanced to ensure that the funds are used for the sole purpose of infrastructure and legacy projects.

After consideration in the Committee of the Whole, the executive bill scaled the third reading and was passed.

President Bola Tinubu is expected to sign the amended bill into law.