'We Had to Borrow': Buhari Begs Lawmakers to Accept Restructuring CBN’s N23trn Loan to FG, Gives Reasons

'We Had to Borrow': Buhari Begs Lawmakers to Accept Restructuring CBN’s N23trn Loan to FG, Gives Reasons

  • President Muhammdu Buhari has again asked lawmakers to consider its proposal to swap the Federal Government's debt to the CBN into a long-term loan
  • Through its ways and means advances, the Central Bank of Nigeria provided N23 trillion to the federal government
  • Buhari argues that the debts were collected because there were no other options, and it is important it is restructured

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President Muhammadu Buhari has passionately enjoined lawmakers to accept its proposal to restructure the N23.8 trillion Ways and Means advances collected by the Federal Government from the Central Bank of Nigeria.

The Punch reports that lawmakers recently rejected the proposal for the loan to be restructured citing that the loans are not known to the Nigerian constitution

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However, in his budget speech to parliament after signing the 2023 budget into law on Tuesday, 3 January 2023, Preside Buhari again requested that the lawmaker reconsider his request for a loan-to-bond swap.

Buhari CBN loans lawmakers
Buhari speaks to lawmakers on CBN loans Photo credit: Presidency
Source: Facebook

Why Buhari wants CBN's loans restructured

Ajazarra reports that Buhari warned the lawmakers that if his request is rejected the next government will have to pay 1.8 trillion naira ($4bn) extra interest this year.

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He added that currently the federal government pays a 3 percent margin above the central bank’s lending rate of 16.5 percent but his administration has negotiated a rate of 9 percent for the bonds.

Economist warns Nigeria

The International Monetary Fund has consistently warned the federal government to phase out central bank financing of the government.

The global institution noted that the loans are fueling inflation which as of November 2022 was at 21.47%.

Read also

Nigeria’s debt stock to hit N77 trillion in 2023 as FG embarks on new borrowings

It argued that if it is stopped will help reduce Nigeria's double-digit inflation

Also, Economists say Nigeria’s government is spending more money on debt repayments than on education and health.

However, Buhari has consistently maintained that his government had no choice but to borrow its way out of two recessions in the past seven years.

Growth of CBN loan under Buhari's administration

  • December 2015: N856b
  • December 2016; N2.2t
  • December 2017: N3.3t
  • December 2018, N5.4t
  • December 2019: N8.7t
  • December 2020 N13.1t
  • December 2021; N17.4t
  • December 2022: N23.8t

See the economic performance of Buhari and Obasanjo

Meanwhile, the media space in recent days has been agog with commentaries of president Buhari and former president Olusegun Obasanjo

The comments started after Obasanjo publicly endorsement of Labour party candidate Peter Obi for the presidency

Legit.ng has decided to compare the economic numbers under the two administrations as Buhari prepares to leave office.

Source: Legit.ng

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