Lawmakers Reach Final Decision on Buhari’s N22.7trn CBN Loan Request, Repayment Will Take 40 Years
- President Buhari has finally achieved his request to convert the CBN N22.7 trillion loan into a 40-year bond
- During his tenure, Buhari consistently took loans from the apex bank despite questions about the legality
- The development means that Nigeria's public debt is now officially at N70 trillion
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President Muhammadu Buhari has received approval from the Nigerian Senate to restructure the N22.7 trillion ($55.2 billion) loan borrowed by the Federal Government from the Central Bank of Nigeria (CBN) through Ways and Means Advances.
The Senate's approval comes after four months of waiting and rejections.
Source: Facebook
The timeline of Buhari CBN's loan request
In December 2022, Buhari sent a letter to the National Assembly seeking approval to convert the N22.7 trillion to a 40-year bond sold to investors at 9% interest with a three-year moratorium.
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However, the request was rejected due to concerns about the debt's constitutionality.
On January 17, President Buhari requested the lawmakers to reconsider their stance.
In response, the Senate formed a special committee to gather the required information on the debt through communication with the executive.
However, the lawmakers did not approve the plan before recess on January 25.
Since then, there has been silence regarding the loan until Wednesday, May 4, 2023, 26 days before the end of Buhari's tenure, when the lawmakers decided to accept Buhari's request.
Lawmakers accept Buhari's loan request
According to Punch, Senate majority leader, Ibrahim Gobir, led the debate on Buhari's request for consideration.
He stated that Buhari had made most of the requests for funds through CBN loans to finance the budget due to revenue shortfalls.
Gobir also argued that the Federal Government heavily relied on Ways and Means to finance its budget deficit due to revenue shortfalls caused by the COVID-19 pandemic and low oil prices, to keep the country functioning for its citizens.
His words:
“The Senate Special Committee, after exhaustive deliberations, recommended, among others, the restructuring of N22, 719,703,774,306.90 for Ways and Means Advances be approved because the advances were made to ensure that the government does not shutdown;
“The panel further sought the approval of the Senate for the sum of N180,463,062,187 being the balance of the supplementary budget and the interest accrued on the Ways and Mean Advances."
Implication of CBN loans
The decision by the lawmaker to assent to Buhari's request means that Nigeria's public debt has now reached N68.95 trillion.
Legit.ng had earlier reported that the Debt Management Office announced that Nigeria's public debt stood at N46.25 trillion at the end of December 2022.
On repayment of the CBN loan, the Federal Government said the loan would be repaid using securities such as treasury bills and bonds issuance.
Nigeria repays China, Islamic bank, others N3.63tn debt
Meanwhile, in another report, Legit.ng revealed that Nigeria has successfully repaid part of its debt to countries and institutions.
The report provided a breakdown of how the money was paid to China and Islamic banks, among others.
Although the repayment is good news, the Nigerian government has borrowed another N6.69 trillion.
Source: Legit.ng
