According to minutes of the meeting from Wednesday, the Nigerian senate has granted President Muhammadu Buhari’s request to convert 23.7 trillion naira ($52 billion) in short-term loans owed to the central bank into long-term debt.
Before he leaves office this month after serving the maximum two terms, Buhari would be able to sign the legislation into law if the lower House of Representatives approved it at a later Thursday meeting.
When Buhari submitted his proposal to the legislature in December, some members had concerns with the strategy and wanted additional details on how the funds were being used.
Senators agreed to convert the short-term loans into 40-year debt with 9% interest after a Senate panel’s report on Wednesday revealed that the funds were used to support state governments and pay for federal government activities.
The Debt Management Office predicted in January that with the loan-to-bond swap and additional borrowings to cover the 2023 budget, Nigeria’s overall debt may reach $172 billion.
According to official statistics, Nigeria spent more than 90% of its income on debt repayments last year, leaving little money for spending on health and education, but Buhari has claimed that his administration was forced to borrow in order to escape two recessions in the previous seven years.
Due to crude oil theft in the Niger Delta, Africa’s greatest economy has struggled with minimal revenue.
