The Nigerian Senate has introduced a bill to amend the Central Bank of Nigeria (CBN) Act of 2007, proposing a 21-year imprisonment penalty for breaches of the CBN Act limit on ways and means advances.
This proposed legislation, spearheaded by Senator Mukhail Adetokunbo Abiru (Lagos East), aims to significantly increase the penalties for naira abuse and enhance the CBN’s ability to fulfil its primary objectives.
The bill, which is entitled ‘A Bill for an Act to Amend the Central Bank of Nigeria Act No. 7 of 2007’, with a copy of the amendments seen by Nairametrics, overhauls Section 38 of the Principal Act by introducing stringent measures to regulate temporary advances granted by the CBN to the Federal Government.
According to the amendment bill, any individual or group found guilty of violating the provisions of Section 38 will be required to refund the amount exceeding the set limits and will face imprisonment for a minimum period of 21 years without the option of a fine.
It reads: “Any person or group of persons who breaches or is involved in the breach of the provision of this section 38 shall be guilty of an offence and be liable to refund such amount that exceeds the limits set in this section and shall also be liable to imprisonment for a minimum period of 21 years with no option of fine.”
This amendment comes at a time when a former CBN governor, Godwin Emefiele, whose tenure is known for breaching the CBN Act limit, is battling several court cases from the Economic and Financial Crimes Commission (EFCC).
Also, the amendment expanded the period from just the previous year to the previous three years, giving the Federal Government more borrowing space from the CBN.
The amendment bill specifies that temporary advances to cover budget revenue deficiencies should be granted at interest rates determined by the CBN in collaboration with the Coordinating Committee for Monetary and Fiscal Policies.
“The interest rate must not be lower than the average Monetary Policy Rate (MPR) of the preceding 12 months.
“The total amount of such advances outstanding shall not at any time exceed ten percent of the previous year’s actual revenue of the Federal Government in the preceding three years excluding proceeds from assets sale,” it said.
The amendment bill states that advances must be repaid within 12 months from the date they are granted. If not repaid within this period, the interest rate increases by 10 per cent.
