In a compelling move, Nigerian President Bola Ahmed Tinubu has made a compelling appeal to the Nigerian Senate. He has called for the approval of securitization of the substantial N7.3 trillion outstanding debit balance in the consolidated revenue fund, also known as Ways and Means advance.
During the Saturday plenary session, Senate President Godswill Akpabio read out the President’s letter to the Senate. In the communication, President Tinubu expressed the urgency for the securitization of the outstanding Ways and Means advance to the federal government before the end of 2023. He cited Section 38 of the Central Bank of Nigeria Act 2017, which allows temporary advances to the federal government to bridge budget deficits as the legal basis for his request.
Bolstering his appeal with data from the Central Bank of Nigeria, President Tinubu highlighted that the consolidated revenue fund had accumulated a substantial amount of N7.3 trillion as of December 11, 2023, primarily due to domestic debt servicing, both in terms of principal and interest. He underscored the potential benefits of securitization, emphasizing that it could lead to a reduction in debt service costs. The resulting lower interest rates would also contribute to reducing the budget deficit.
With a pivotal sense of urgency, the President’s letter invited the Senate to consider and endorse the securitization of the N7.3 trillion outstanding debit balance in the CNRF as of December 11, 2023.
This significant request comes in the wake of the Senate’s prior approval in May 2023 for the N22.7 trillion loans extended to the federal government under the Central Bank of Nigeria’s Ways and Means provision.
President Tinubu’s plea to securitize the outstanding debit balance of N7.3 trillion demonstrates a crucial step in addressing Nigeria’s financial landscape, significantly influencing debt servicing and the national budget. As the Senate deliberates on this consequential matter, the ramifications of its decision are set to resonate deeply within the economic fabric of Nigeria.
