President Bola Ahmed Tinubu has asked the Nigerian Senate to approve the securitization of the outstanding debit balance of N7.3 trillion in the consolidated revenue fund also known as Ways and Means advance.
The president sought this approval in a letter read on the floor of the Senate by Senate President Godswill Akpabio during plenary on Saturday.
The President, in his letter, said although the federal government was considering various measures to forestall the use of ways and means advances for domestic debt servicing, it has, however, become highly imperative to securitize the outstanding ways and means advance to the federal government before the end of 2023.
Tinubu said his request was in line with the Provision of Section 38 of the Central Bank Of Nigeria Act 2017, which grants temporary advances to the federal government to fill up the budget deficit.
He said data from the CBN indicates that the consolidated revenue fund stood at N7.3 trillion as of December 11 2023, largely due to domestic debt servicing, principal and interest.
Tinubu emphasized that the securitization of the ways and means will lead to the realization of several benefits, including the reduction of debt service cost.
The President added that the savings arising from the lower interest rate will reduce the deficit in the budget.
“Given the preceding, the Senate is invited to consider and approve securitization of the outstanding debit balance of N7.3 trillion in the CNRF as of December 11 2023”, the letter read.
Recall that in May 2023, the Senate approved the N22.7 trillion loans the Central Bank of Nigeria, CBN, extended to the federal government under its Ways and Means provision.
(Daily Post)
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