Nigeria to pay extra $4bn if loan-bond swap is denied: Buhari | Business and Economy News
Some lawmakers have questioned the central bank’s plan to convert $53 billion in overdrafts into 40-year bonds.
Nigeria’s President Muhammadu Buhari has said Africa’s largest economy will have to pay 1.8 trillion naira ($4 billion) more in interest this year if parliament rejects a request for a loan-to-bond swap. central bank overdrafts to the government.
Buhari made the comments during his budget speech to parliament after signing into law the 2023 budget on Tuesday.
In December, the Senate delay a decision about the president’s request to convert the central bank’s $53 billion overdraft to the government into a 40-year bond after some lawmakers questioned the plan.
In his remarks Tuesday, Buhari said the government is currently paying a 3% interest rate above the central bank’s lending rate of 16.5% but his administration has negotiated a 9% interest rate for bonds.
Lawmakers increased the size of the 2023 budget by 6.4% to 21.83 trillion naira ($49 billion) after they raised the hypothetical oil price benchmark to $75 a barrel from $70.
“Given the impending transition… I have decided to sign into law the 2023 appropriations bill… to allow implementation of this measure to begin immediately,” the president said, referring to The general election is coming up in February.
After completing a maximum of two constitutionally permitted terms, Buhari will not run for re-election.
Rising debt, weak economic growth, high inflation and growing insecurity are major problems for many Nigerian voters.
The International Monetary Fund has called on Nigeria to phase out central bank funding to the government to help reduce double-digit inflation.
Economists say the Nigerian government is spending more money on debt repayment than it does on education and healthcare, but Buhari said his government has no choice but to borrow to get out of the two crises. recession in the past seven years.