The Senate on Saturday approved the request of President Bola Tinubu for the securitisation of the outstanding debit balance of N7.3 trillion Ways and Means from the Central Bank of Nigeria (CBN).
President Tinubu had written a letter to the Senate to that effect. The letter was read yesterday by the President of the Senate, Senator Godswill Akpabio. Senators after the reading went into the Committee of the Whole and it approved it after consideration.
Tinubu said in the letter addressed to the Senate President, Godswill Akpabio, and read at plenary on Saturday that:
“I will like to call the attention of 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 do not surpass five per cent 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 at Dec 2023, that is due to domestic debt servicing, principal and interest.
“While the Federal Government is considering various measures to forestall the use of ways and means advances for domestic debt servicing,” he said.
Tinubu added: “It has become highly imperative to securitise the outstanding ways and means advance of the Federal Government of Nigeria before end of year.
“The securitisation of the Ways and Means will lead to the realisation of the following benefits among others.
” Reduction of debt service costs as interest rate for the securitise ways and means is lowered at nine per cent compared to three per cent previously adopted.
“The savings arising from the much lower interest rate will help to reduce the deficit in the budget and improvement in debts 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 outsatnding debit balance of N7.3 trillion in the same order as at December 2023”.
