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President Muhammadu Buhari says it will cost the federal government N1.8 trillion in interest if the national assembly fails to approve N23.7 trillion in extra-budgetary spending.
The president had asked the national assembly to approve the sum he said were funds provided by the Central Bank of Nigeria (CBN) through loans for “emergencies” in the space of 10 years.
Last week, the senate suspended the request of Buhari after a rowdy session.
Senators Betty Apiafi and Thompson Sekibo had argued that the request was not constitutional.
They also demanded that before the upper legislative chamber could approve the request, the senate must have the details of what the funds were spent on.
Speaking at the signing ceremony of the 2023 budget in Abuja on Tuesday, Buhari said he has no intention to contest the decision of the lawmakers.
“I also urge the national assembly to reconsider its position on my proposal to securitise the federal government’s outstanding Ways and Means balance at the Central Bank of Nigeria (CBN),” the commander-in-chief said.
“As I stated, the balance has accumulated over several years and represents funding provided by the CBN as lender of last resort to the government to enable it to meet obligations to lenders, as well as cover budgetary shortfalls in projected revenues and/or borrowings.
“I have no intention to fetter the right of the national assembly to interrogate the composition of this balance, which can still be done even after granting the requested approval.
“Failure to grant the securitisation approval will however cost the government about N1.8 trillion in additional interest in 2023 given the differential between the applicable interest rates which is currently MPR plus three percent and the negotiated interest rate of nine percent and a 40-year repayment period on the securitised debt of the Ways and Means.”
