Unless the Monetary Policy Committee (MPC) makes a U-turn on its aggressive monetary tightening, the Federal Government may pay as much as N4.65 trillion servicing its debt held by the Central Bank of Nigeria (CBN) this year.
As at the end of last year when President Muhammadu Buhari sought the Senate’s approval to securitise the CBN facility, the ways and means (W&M) stood at N22.7 trillion.
At the signing of the 2023 budget, the President said the government could incur an additional N1.8 trillion on interest payment if the plan to convert to a bond fails.
The government, according to Buhari, had agreed to pay the CBN MPR plus 300 basis points (bps) as interest on the facility.
Alternatively, the government convert it to a long-term bond with an arrangement said to have been reached for a nine-percent offer. But the securitisation plan can only happen if the Senate approves the plan.
The Senate seems…
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