By Adedapo Adesanya
President Muhammadu Buhari has written to the Senate, requesting the approval of restructuring the N23.7 trillion Ways and Means advances given to the federal government by the Central Bank of Nigeria (CBN).
The President, in a letter read by Senate President, Mr Ahmad Lawan, during Wednesday’s plenary session, explained that Ways and Means were loans from the CBN to the federal government for emergency funding of delayed receipt of fiscal deficit.
He said the Ways and Means balance as of Monday, December 19, 2022, was N22.7 trillion.
Mr Buhari further stated in the letter that he had approved the securitisation of this debt into bonds along the following terms: Amount; N23.7 trillion; Tenure 40 years; Moratorium on principal repayment; three years; and a pricing interest rate of 9 per cent.
Mr Lawan forwarded the request to the Senate Committee on Finance for further legislative action.
He said the request and the N819.5 billion supplementary budget would be considered and passed by the Senate on Thursday alongside the N20.51 trillion 2023 appropriation bill.
The Nigerian government became dependent on central bank borrowing after oil prices collapsed in 2020. The financing has helped staunch the shortfalls recorded in the country’s needed wealth since non-oil revenues could not cover the gap brought on by the dwindling oil revenues.
Last year, the Minister of Finance, Mrs Zainab Ahmed, and the CBN Governor, Mr Godwin Emefiele, disclosed that they would be ending the scheme by 2025 after the International Monetary Fund (IMF) warned that financing was costly.
Modupe Gbadeyanka