The Senate of Nigeria has approved President Bola Tinubu’s request to borrow $7.8 billion and €100 million as part of the 2022–2024 borrowing plan of the Federal Government. The approval was granted after the Senate considered and adopted the report of its committee on Local and Foreign Debt during a plenary session.
President Tinubu stated that the loan facility was approved by the Federal Executive Council under former President Muhammadu Buhari on May 15, 2023. The funds are intended to finance various sectors, including health, education, infrastructure, agriculture, and security, as part of efforts to bridge the financial gap and stimulate economic activities.
Additionally, the Senate approved Tinubu’s request to securitize the Central Bank of Nigeria’s N7.3 trillion Ways and Means advances to the Federal Government. The securitization aims to reduce debt service costs and extend the repayment period of existing loans. The interest rate for the securitized Ways and Means advances has been reduced to 9% per annum, compared to the Monetary Policy Rate (MPR) of 0.3%. The move is expected to result in savings that will help reduce the budget deficit.
Ways and Means provisions allow the government to borrow from the central bank for short-term or emergency financing to support fiscal shortfalls or delayed cash receipts. The Senate’s approval reflects ongoing efforts by the government to secure financing for critical sectors and manage fiscal challenges.
