FG will convert additional N7.5trn CBN loan to debt

Lawmakers have approved a request from President Bola Tinubu to convert N7.5 trillion ($8.2 billion) in overdrafts from the central bank to longer-dated bonds that will be added to the country’s debt.

The senate granted approval at a sitting on Saturday during which they also endorsed a N28.77 trillion spending plan for 2024, higher than the N27.5 trillion figure proposed by Tinubu. 

Nigeria’s president said the conversion will reduce the cost of servicing the debt to June per cent when compared to the monetary policy rate plus three per cent that it currently attracts, and also improve the transparency of liabilities owed to the banking regulator. 

Lawmakers in May approved the conversion of N22.7 trillion in loans from the central bank into bonds. The request was made by Tinubu’s predecessor, Muhammadu Buhari, under whose administration loans from the central bank rose by more than 3,000 per cent. It helped to increase Nigeria’s outstanding debt by more than 50 per cent.

Data by the Debt Management Office showed that Nigeria’s total public debt profile stood at N87.9 trillion in September 2023.