FG To Service CBN Overdraft N4.65 Trillion This Year


Barring any unforeseen, the Federal Government may pay as much as N4.65 trillion servicing its debt held by the Central Bank of Nigeria (CBN) this year.

Reports indicate that as of the end of last year when President Muhammadu Buhari sought the Senate’s approval to securitise the CBN facility, the ways and means (W&M) stood at N22.7 trillion. At the signing of the 2023 budget, the President said the government could incur an additional N1.8 trillion on interest payment if the plan to convert to a bond fails.

The government, according to Buhari, had agreed to pay the CBN MPR plus 300 basis points (bps) as interest on the facility.

Alternatively, the government convert it to a long-term bond with an arrangement said to have been reached for a nine-per cent offer. But the securitisation plan can only happen if the Senate approves the plan.

The Senate seems stuck to its gun – from demanding an explanation of the details of the facility to indifference.

The Senate President, Ahmad Lawan, had said that the Senate would approve the President’s request as long as the required details of the spending were provided by the Finance Minister, Zainab Ahmed, and Governor of the Central Bank, Godwin Emefiele.

But at the last plenary, the upper chamber failed to consider the request before proceeding with the election break. The report said the Leader of the Senate, Ibrahim Gobir, who chairs the special committee set up to get details of the document from the relevant offices said nothing about the issue during the plenary.

“The Ways and Means balance as of 19th December 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 nine per cent. Your concurrence and approval are sought to allow for the implementation of the same,” Buhari said in his letter to the Senate.