Nigeria’s $53b loan swap: Additional $4b interest to be paid if jettisoned by lawmakers. – Buhari.

Africa

Nigeria’s $53b loan swap: Additional $4b interest to be paid if jettisoned by lawmakers. – Buhari.

January 3, 2023January 3, 2023

President Muhammadu Buhari declared on Tuesday that if parliament rejects a request for a loan-to-bond swap on the central bank’s overdrafts to the government, Nigeria will pay an additional 1.8 trillion naira ($4 billion) in interest in 2023.

After several senators raised concerns about the proposal last week, the Senate postponed making a decision on the president’s request to convert $53 billion in central bank overdrafts to the government into 40-year bonds.

During a speech on Tuesday, Buhari claimed that his administration had negotiated a rate of 9% for the bonds, which is 3% less than the government’s current rate of 3% over the central bank’s lending rate of 16.5%.

The budget for 2023 was boosted by lawmakers by 6.4% to 21.83 trillion naira ($49 billion) after they revised the $70 per barrel oil price projection to $75.

A general election is scheduled for February, thus Buhari remarked, “Considering the upcoming transition process, I decided to sign the 2023 appropriation bill into law… to enable its implementation to begin immediately.”

Buhari is not running for reelection since he has served the maximum number of terms permitted by the constitution.

Many Nigerian voters consider rising debt, slow economic growth, high inflation, and growing insecurity to be their top concerns.

To assist lower double-digit inflation, the International Monetary Fund has encouraged Nigeria to gradually stop funding the government with central bank funds.

However, Buhari has claimed that his government was forced to borrow in order to exit two recessions in the previous seven years. Economists claim that Nigeria’s government spends more money on debt repayments than on healthcare and education.

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