The Senate on Wednesday approved a legislation aimed at halting what it called extra budgetary expenditure at the Central Bank of Nigeria (CBN) – in a move that will check alleged financial recklessness on the part of the apex bank.
This is sequel to the adoption of a bill titled: “A bill for an Act to amend the Central Bank of Nigeria Act 2007 to ensure transparency and accountability in the operation of the bank and subject intervention advances to the approval of National Assembly.”
While passing the bill for second reading, the Senate accused the apex bank of acting in contravention of the provision of the Constitution and the Fiscal Responsibility Act through what it described as extra-budgetary intervention to selected bodies, institutions and agencies under the guise of intervention funds.
Leading a debate on the motion, the sponsor, Senator Rose Oko, lamented that there is no mechanism in place to monitor and track the CBN intervention funds, adding that this has made it difficult for the lawmakers to properly oversight the agency.
Senator Oko further called out various intervention funds, which the CBN had carried out without the National Assembly’s approval.
“The total capital budget for 2016 was N1.8 trillion. If N1.2 trillion was indeed disbursed or intended as intervention fund, then an amount almost size the capital budget was disbursed without appropriation and tracking to know effectiveness of the intervention in the economy,’’ she said.
The senator also said there was need to bring the CBN Act 2007 in line with provisions of Nigerian constitution by subjecting it to National Assembly scrutiny and approval.
According to her, some of the various intervention funds given out by CBN without National Assembly approval in recent times are the N620 billion bailout for five banks, including Afribank Plc, Intercontinental Bank Plc, Union Bank of Nigeria, Oceanic Bank and Finbank plc.
She said the intervention funds were also extended as donations to tertiary institutions running into several billions of naira, the N300 billion bailout to states, drawn from $2.1 billion NLNG’s taxes and dividends to pay salaries.
Virtually all the senators who contributed to the debate on the bill supported its motive, upon which the Senate passed it for second reading.
The upper chamber then mandated its Committee on Banking, Insurance and other Financial Institutions to carry out more legislative work on it within the next six weeks.