Unending National Debt: Senate approves Buhari’s N22.7tn extra-budgetary spending, just few days into new administration
Concerned and popular economists, Nigeria Employers’ Consultative Association and opposition parties have condemned the act of President, Major General Muhammadu Buhari, (retd.), and the Senate, aso Naija reports.
This is due to the unending national debt and the new approval of government’s N22.7tn extra-budgetary spending on Wednesday.
With the approval by the Senate of the N22.7tn loan from the Central Bank of Nigeria extended to the Federal Government under its Ways and Means provision, Nigeria’s external debt will rise to N68.95tn.
The Debt Management Office recently revealed that Nigeria’s total public debt stock increased to N46.25tn in the fourth quarter of 2022.
It stated that the figure consisted of the domestic and external total debt stocks of the Federal Government and the sub-national governments (36 state governments and the Federal Capital Territory).
On Wednesday, Senate approved the request of the President for Ways and Means Advances restructuring to the tune of N22.7tn, which then adds to the existing debt stock.
The Ways and Means provision allows the government to borrow from the apex bank if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
Since the government started experiencing a significant shortfall in revenue, it has relied heavily on the central bank to finance its expenditure programmes via Ways and Means.
The Federal Government had said it would repay the loan with securities such as treasury bills and bonds issuance.
Buhari had last year asked the Senate to approve his proposal to securitize the loan, but the Red Chamber rejected the request, citing a lack of details.
Buhari, while appealing to the Senate to reconsider its stand, said failure to grant the securitization approval would cost the government about N1.8tn in additional interest in 2023.
The Senate Leader, Ibrahim Gobir, who led the Senate in the debate for the approval of the Ways and Means on Wednesday, explained that part of the money was given as loans to states.