President Bola Tinubu has formally requested the Senate’s approval for the securitisation of the balance of Ways and Means in the Consolidated Revenue Fund (CRF) of the Federal Government of Nigeria.
The request, outlined in a letter directed to Senate President Godswill Akpabio and presented during Saturday’s plenary session in Abuja, draws attention to Section 38 of the CBN Act 2007, allowing the Central Bank to grant temporary advances to the Federal Government.
President Tinubu emphasized that this request pertains to addressing a temporary deficiency in budget revenue, ensuring the overdraft doesn’t exceed 5 percent of the government’s revenue from the previous year.
Tinubu in the letter stated thus, “As per information from the CBN, the Consolidated Revenue Fund (CRF) account of the Federal Government of Nigeria stood at N7.3 trillion as of December 2023, attributed to domestic debt servicing, both principal and interest.”
He further elaborated on the necessity to securitise the outstanding Ways and Means advance before the year’s end, emphasizing several anticipated benefits. These included a reduction in debt service costs, with the interest rate for the securitized Ways and Means lowered to nine percent compared to the previous three percent.
Additionally, the President outlined that the savings from the decreased interest rate would assist in reducing the budget deficit and improving debt transparency, as securitized Ways and Means advances would be included in public debt statistics.
He urged the Senate to consider and approve the securitisation of the outstanding debit balance of N7.3 trillion as of December 2023.
