Buhari seeks Senate’s approval to restructure CBN’s N23.7trn loans to FG

President Muhammadu Buhari has requested that the Senate approve its plan to restructure N23.7 trillion Ways and Means advances given the Federal Government by the Central Bank of Nigeria (CBN).

In a letter read by Ahmed Lawan, president of the Senate, Buhari said Ways and Means were advanced from the CBN to the Federal Government for emergency funding of delayed receipt of fiscal deficit

The letter titled “Restructuring of ways and means advances”, reads in part: “The ways and means advances by the central bank, to the Federal Government has been a funding option to the government to cater for short term or emergency finance to fund delayed government expected cash receipt of fiscal deficit.

“The ways and means, balances as of December 19, 2022 is N22.7 trillion. I have approved the securitisation of the ways and means balances along the following terms Amount: N23.7 trillion; Tenure: 40 years, Moratorium on principal repayment, three years, pricing interest rate 9 percent. Your concurrence and approval is sought to allow for the implementation of same”

The letter also revealed that President Buhari requested from the CBN N1 trillion urgent loan through its ways and means facility.

The new loan will be added to the N22 trillion already borrowed over the years.

The president also requested that the Senate also approve that all the loans be converted to 40-year bonds at 9 percent interest.

Lawan later forwarded the request to the Senate committee on finance for report consideration and passage in plenary on Thursday.

READ ALSO:Buhari seeks Senate approval for N819bn supplementary 2022 budget

He said the request and the N819.5 billion supplementary budget will be considered required passage along with the N20.51 trillion 2023 appropriation bill and other critical ones.

We are referring these letters to our committees on Appropriation, Finance, works, water resources and agriculture today. They have to work on it and ensure that we follow the due processes.

“In that respect, the minister of finance, the CBN, minister of agriculture, water resources and works to be invited and make themselves available for this process and to ensure that we get the right information between today and tomorrow.

“Tomorrow (Thursday) by the grace of God, will be the last legislative day for the 9th senate this year. It will be quite busy for us because we have to receive the report of the 2023 Appropriation Bill from our committee on Appropriations.

“We will also receive a report on the Finance Bill, 2022 from our committee on Finance. Also, the committee on power will be bringing the report on power, so it’s going to be very busy for us. So, we may have to stay here for many hours to pass or consider the report”, he said.

Data obtained from CBN’s website, showed that the Ways and Means’ debt climbed from N17.5 trillion in December 2021 to N23.8 trillion in October 2022 — an increase of N6.3 trillion in 10 months.

A breakdown showed the federal government borrowed N704.3 billion from the CBN in January, N226.3 billion in February, N507.7 billion in March, and N112.3 billion in April.

It also borrowed N569.6 billion in May, N335.8 billion in June, N695.2 billion in July, N1.46 trillion in August, N749.4 billion in September, and N957.2 billion in October.

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