Tinubu requests Senate approval for securitisation of outstanding N7.3tn ways and means

President Bola Tinubu on Saturday requested the Senate approval of the outstanding N7.3 trillion Ways and Means.

The Ways and Means allow the Federal Government to take from the Central Bank of Nigeria (CBN) short-term or emergency loans to fund delayed projects or address immediate cash needs.

Tinubu made the request in a letter addressed to the Senate President, Godswill Akpabio, and read at the plenary in Abuja.

The letter read: “I would like to call the attention of the Senate to the provisions of section 38 of the CBN Act 2007, which stipulates that the apex bank may grant temporary advances to the Federal Government.

“In respect of temporary deficiency of budget revenue provided, such overdraft does not surpass five percent of government revenue from the previous year.

“The Senate is invited to note that from available information by the CBN, the Consolidated Revenue Fund (CRF) account of the Federal Government of Nigeria (FGN) stood at N7.3trillon as of December 2023 that is due to domestic debt servicing, principal and interest.

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“While the Federal Government is considering various measures to forestall the use of ways and means advances for domestic debt servicing.

“It has become highly imperative to securitize the outstanding ways and means advance of the Federal Government of Nigeria before end of year.

“The securitization of the Ways and Means will lead to the realisation of the following benefits among others.

“Reduction of debt service costs as the interest rate for the securitize ways and means is lowered at nine percent compared to three percent previously adopted.

“The savings arising from the much lower interest rate will help to reduce the deficit in the budget and improvement in debt transparency as securitised ways and means advances are included in the public debts statistics.”

“In view of the forgoing the Senate is invited to kindly consider and approve the securitisation of the outstanding debit balance of N7.3 trillion in the same order as of December 2023.”

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