Following the Senate’s consideration and adoption of the Local and Foreign Debt Committee’s report at Saturday’s session, the request was granted.
According to Tinubu, on May 15, 2023, the Federal Executive Council, which was led by former President Muhammadu Buhari, authorized the loan facility to fund a variety of sectors, including insecurity, agriculture, infrastructure, health, and education.
The president went on to say that in order to close the financial gap and get the nation’s economic activities back to normal, a foreign loan has become necessary. The money will be used to develop financial management reforms as well as infrastructure, agriculture, health, education, water supply, security, and jobs.
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Similarly, the Red Chamber also okayed Tinubu’s request to securitise the Central Bank of Nigeria N7.3trn Ways and Means advances to the Federal Government.
Tinubu had, in a letter read by the Senate President yesterday, said the securitisation aims to reduce debt service costs and extend the repayment period of the existing loans.
The Ways and Means provision allows the government to borrow from the Central Bank if it requires short-term or emergency financing to support delayed government projected cash receipts of fiscal shortfalls.
The interest rate for the securitised Ways and Means advances has been reduced to 9% per annum, compared to the MPR of 0.3%.
“The savings arising from the much lower interest rate will have to reduce the deficit in the budget,” Tinubu said.
