Buhari Seeks Loan-Bond Swap to Reduce Interest Payment
Nigeria will pay N1.8 trillion, which is equivalent to $4 billion extra interest in 2023 if National Assembly rejects a loan-to-bond swap request on the central bank’s overdrafts to the government, President Muhammadu Buhari said on Tuesday after signing the 2023 budget into law.
In 2022, Zainab Ahmed, finance minister hints about plan to securitise funds raised by Nigerian government in an effort to cushion the effect of fiscal slipagge via Central Bank ways and means window.
The overdraft sum was valued at about N23 trillion while more than N44 trillion is officially declared as public debt in the third quarter of 2022. >>>Naira, External Reserves Slump amidst Rising FX Demand
According to Buhari, federal government currently pays a 3% margin above the central bank’s lending rate of 16.5% but his administration has negotiated a rate of 9% for the bonds.
With population of rising above 200 million, Nigerian lawmakers increased the size of the 2023 budget by 6.4% to N21.83 trillion or $49 billion after they raised the oil price assumption to $75 a barrel from $70.
“Considering the imminent transition process … I decided to sign the 2023 appropriation bill into law … to enable its implementation to commence without delay,” Buhari said, referring to a general election coming up in February.
Having completed the maximum two terms allowed by the constitution, Buhari is not standing for re-election. Rising debt, weak economic growth, high inflation and mounting insecurity are major issues for many Nigerian voters.
The International Monetary Fund (IMF) has urged Nigeria to phase out central bank financing of the government to help reduce double-digit inflation rate. # Buhari Requests Loan-Bond Swap to Reduce Interest Payment
