President Muhammadu Buhari has alerted the National Assembly to the risk of N1.8 trillion interest payment by the Federal Government.
Buhari said this is in the event that the federal lawmakers fail to grant securitisation approval of his N22.7 trillion Ways and Means request.
The President made the appeal during the signing of the 2023 Appropriation Act in Abuja on Tuesday.
“I also urge the National Assembly to reconsider its position on my proposal to securitize the Federal Government’s outstanding Ways and Means balance at the Central Bank of Nigeria (CBN),” he said.
“As I stated, the balance has accumulated over several years and represents funding provided by the CBN as lender of last resort to the government to enable it to meet obligations to lenders, as well as cover budgetary shortfalls in projected revenues and/or borrowings.
“I have no intention to fetter the right of the National Assembly to interrogate the composition of this balance, which can still be done even after granting the requested approval.
“Failure to grant the securitization approval will however cost the government about N1.8 trillion in additional interest in 2023 given the differential between the applicable interest rates which is currently MPR plus three percent and the negotiated interest rate of 9 percent and a 40-year repayment period on the securitised debt of the Ways and Means.”
The Senate, last week, stepped down restructuring of the President’s request until more documents were presented to the upper chamber for further legislative action.
The lawmakers, however, approved that N819 billion be excised from N1 trillion ways and means to fund the 2022 supplementary budget where the Ministry of Agriculture is to get N69 billion; Ministry of Water Resources, N15.5 billion; the Federal Capital Territory, N30 billion; and Ministry of Works and Housing, N704 billion.
Buhari signed into law the Appropriation Bill, 2023 totalling N21.83 trillion.
The President said the aggregate expenditures of N21.83 trillion is an increase of N1.32 trillion over the initial Executive Proposal for a total expenditure of N20.51 trillion.
He explained that the 2022 Supplementary Appropriation Act would enable the administration to respond to the havoc caused by the recent nationwide floods in the infrastructure and agriculture sectors.
Buhari also said the Minister of Finance, Budget and National Planning will subsequently provide more details of the approved budget and the supporting 2022 Finance Act.