The federal government says it will repay the N20 trillion debt owed to the Central Bank of Nigeria (CBN) with securities such as treasury bills and bonds issuance.
Zainab Ahmed, minister of finance, budget and national planning, made this known on Wednesday in Abuja while giving a breakdown of the 2023 appropriation bill.
The federal government has been borrowing from the CBN through “Ways and Means”.
Ways and Means is a loan facility through which the CBN finances the government’s budget shortfalls.
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She said President Muhammadu Buhari had approved the securitisation of the N20 trillion debt.
“The total Ways and Means are N20 trillion, and President Muhammadu Buhari has approved securities. The securitisation will be over 40 years with an interest rate of nine percent,” Ahmed said.
“Over the years, we have been paying the interest component at the current rate that is charged on the Ways and Means.”
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The federal government’s borrowing from the CBN has repeatedly exceeded 5 percent threshold of the prior year’s revenue, as stipulated by the CBN Act, 2007.
Editor’s note: The federal government’s plans to repay Ways and Means loans through treasury bills do not contravene the CBN Act. It would have if the apex bank underwrites (or finances) the repayment. As such, our previous headline has been adjusted.
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