President Bola Ahmed Tinubu has asked the Nigerian Senate to securitize outstanding N7.3 trillion ways and means.
This is as the federal government Is considering various measures to forestall the use of ways and means advances for Domestic Debt Servicing.
President Tinubu’s request is contained in a letter read during Saturday plenary by President of the Senate Godswill Akpabio on the need to securitize the outstanding ways and means advances to the federal government of Nigeria before the end of the year 2023.
Tinubu says the securitization of ways and means will lead to Reduction of debt service cost as the interest rate for the securitized ways and means Advances lowered at 9% per annum compared to MPR which is +3%.
He added that the savings arising from the much lowered interest rate, will help reduce the deficit in the budget.
He re-echoed that it will also improve debt Transparency and securitize ways and means advances are included to the public debt Statistics.
Tinubu says available information by the CBN, the consolidated Revenue funds account of the Federal Government of Nigeria, is put at N7. 3 Trillion as at December 11th 2023 largely due to debt servicing and interest.
He asks the senate to consider and approve the securitization of the Outstanding daily balance of N7. 3 Trillion in the Consolidated Revenue Fund as at December 11th 2023.
The Senate had in May 2023, approved the request of the former President Muhammadu Buhari to restructure the N22.7tn loan from the Central Bank of Nigeria extended to the Federal Government under its Ways and Means provision.
The Ways and Means provision allows the government to borrow from the apex bank if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
The request is referred to the committee of the whole house for further deliberation.
Editor: Ena Agbanoma
