President Bola Tinubu has requested approval of Senate for securitisation of the balance of ways and Means in the Consolidated Revenue Fund (CRF) of the Federal Government of Nigeria.
The request is contained in a letter addressed to President of Senate, Godswill Akpabio and read at plenary in Abuja on Saturday.
Tinubu drew the attention of Senate to the provisions of section 38 of the CBN Act 2007, which stipulates that the apex bank may grant temporary advances to the Federal Government.
He explained that the request is in respect of temporary deficiency of budget revenue provided, such overdraft do not surpass five per cent of government revenue from the previous year.
The letter reads in parts: “The senate is invited to note that from available information by the CBN, the Consolidated Revenue Fund (CRF) account of the Federal Government of Nigeria (FGN) stood at N7.3 trillion as at December 2023, that is due to domestic debt servicing, principal and interest.
“While the Federal Government is considering various measures to forestall the use of ways and means advances for domestic debt servicing, it has become highly imperative to securitise the outstanding ways and means advance of the Federal Government of Nigeria before end of year.
He said the securitization of the Ways and Means will lead to the realisation of the following benefits among others:
“Reduction of debt service costs as interest rate for the securitised ways and means is lowered at nine per cent compared to three per cent previously adopted.
“The savings arising from the much lower interest rate will help to reduce the deficit in the budget and improvement in debts transparency as securitised ways and means advances are included in the public debts statistics.
“In view of the forgoing the Senate is invited to kindly consider and approve the securitisation of the outstanding debit balance of N7.3trillion in the same order as at December 2023.