• Latest
  • Trending
  • All
  • News
  • Business
  • Politics
  • Science
  • World
  • Lifestyle
  • Tech
Nigeria to spend next 40 years repaying controversial ₦23.72tr CBN overdrafts to FG

Nigeria to spend next 40 years repaying controversial ₦23.72tr CBN overdrafts to FG

May 8, 2023
TC Chairman, Onitsha South LGA, Orji Promise To Revamp Council

Jubilation in Anambra as Gov Soludo declares free education

September 23, 2023
Gov Soludo orders dislodging of touts and disorderly motor parks at Upper Iweka

Gov Soludo orders dislodging of touts and disorderly motor parks at Upper Iweka

September 23, 2023
The Imperative of Real Governance: A Call to Tackle Spiraling Insecurity

The Imperative of Real Governance: A Call to Tackle Spiraling Insecurity

September 23, 2023
Obi Contributes N50 Million to support Bishop Shanahan College of Nursing, Nsukka

Obi Contributes N50 Million to support Bishop Shanahan College of Nursing, Nsukka

September 23, 2023

NIPR Anambra Council Receives Prof Omenugha

September 23, 2023
Breaking: POPE FRANCIS APPOINTS MSGR. DABOH NEW BISHOP OF ZARIA

Breaking: POPE FRANCIS APPOINTS MSGR. DABOH NEW BISHOP OF ZARIA

September 23, 2023
Archbishop Ugorji Celebrates Archbishop Martins: A Priest of Remarkable Distinction at 40 Years

Archbishop Ugorji Celebrates Archbishop Martins: A Priest of Remarkable Distinction at 40 Years

September 23, 2023
Catholic Bishop’s End Conference,emphasize importance of synodality,morality and other issues

Catholic Bishop’s End Conference,emphasize importance of synodality,morality and other issues

September 23, 2023
Boy 12 makes history as first seminarian admitted into new St Paul Seminary Igbariam,Aguleri Diocese

Boy 12 makes history as first seminarian admitted into new St Paul Seminary Igbariam,Aguleri Diocese

September 23, 2023
NBA lauds Igbo apprenticeship system of business,may adopt it in legal profession reform

NBA lauds Igbo apprenticeship system of business,may adopt it in legal profession reform

September 23, 2023
PDP chieftain Daniel Bwala Slams Tinubu over nepotistic Appointments

PDP chieftain Daniel Bwala Slams Tinubu over nepotistic Appointments

September 23, 2023
Anxiety In 7 Anambra LGAs: As 50 Communities May Be Submerged

Anxiety In 7 Anambra LGAs: As 50 Communities May Be Submerged

September 23, 2023
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Sunday, September 24, 2023
  • Login
Trinitas News
  • Home
  • News
    • All
    • Business
    • Politics
    • Science
    • World
    TC Chairman, Onitsha South LGA, Orji Promise To Revamp Council

    Jubilation in Anambra as Gov Soludo declares free education

    Gov Soludo orders dislodging of touts and disorderly motor parks at Upper Iweka

    Gov Soludo orders dislodging of touts and disorderly motor parks at Upper Iweka

    Obi Contributes N50 Million to support Bishop Shanahan College of Nursing, Nsukka

    Obi Contributes N50 Million to support Bishop Shanahan College of Nursing, Nsukka

    NIPR Anambra Council Receives Prof Omenugha

    Catholic Bishop’s End Conference,emphasize importance of synodality,morality and other issues

    Catholic Bishop’s End Conference,emphasize importance of synodality,morality and other issues

    PDP chieftain Daniel Bwala Slams Tinubu over nepotistic Appointments

    PDP chieftain Daniel Bwala Slams Tinubu over nepotistic Appointments

    Anxiety In 7 Anambra LGAs: As 50 Communities May Be Submerged

    Anxiety In 7 Anambra LGAs: As 50 Communities May Be Submerged

    FG, NLC Meeting Ends In Deadlock

    FG, NLC Meeting Ends In Deadlock

    New Council Member, Prof Omenugha Welcomes By NIPR Anambra Council

    New Council Member, Prof Omenugha Welcomes By NIPR Anambra Council

    Auto Draft

    Ogbaru TC Chairman, Aniegbuna Celebrates Okpotu Festival With Igwe Ngoddy, Atani Community

    Trending Tags

    • Donald Trump
    • Future of News
    • Climate Change
    • Market Stories
    • Election Results
    • Flat Earth
  • Tech
    • All
    • Apps
    • Gear
    • Mobile
    • Startup

    Rap group call out publication for using their image in place of ‘gang’

    Meet the woman who’s making consumer boycotts great again

    New campaign wants you to raise funds for abuse victims by ditching the razor

    Twitter tweaks video again, adding view counts for some users

    A beginner’s guide to the legendary Tim Tam biscuit, now available in America

    India is bringing free Wi-Fi to more than 1,000 villages this year

    Betterment moves beyond robo-advising with human financial planners

    People are handing out badges at Tube stations to tackle loneliness

    Trump’s H-1B Visa Bill spooks India’s IT companies

    Oil spill off India’s southern coast leaves fisherman stranded, marine life impacted

    Trending Tags

    • Flat Earth
    • Sillicon Valley
    • Mr. Robot
    • MotoGP 2017
    • Golden Globes
    • Future of News
  • Entertainment
    • All
    • Gaming
    • Movie
    • Music
    • Sports
    Enterprising Catholic Nun Ventures into Filmmaking to Connect with Youth

    Enterprising Catholic Nun Ventures into Filmmaking to Connect with Youth

    Directors of Sports in Nigerian Universities to commence training

    Directors of Sports in Nigerian Universities to commence training

    FIFA Secretary General Commends Super Falcons and Announces Direct Prize Money Payment to Players

    FIFA Secretary General Commends Super Falcons and Announces Direct Prize Money Payment to Players

    England Under-21s reach Euro 2023 final after brushing aside Israel

    England Under-21s reach Euro 2023 final after brushing aside Israel

    Jake Paul Calls Out Conor McGregor, Says He’s ‘Not Afraid’ of MMA Fight vs. UFC Icon

    Jake Paul Calls Out Conor McGregor, Says He’s ‘Not Afraid’ of MMA Fight vs. UFC Icon

    You’re not bigger than club – PSG gives Mbappe deadline to sign new contract

    You’re not bigger than club – PSG gives Mbappe deadline to sign new contract

    Source: Ancelotti to coach Brazil from 2024 Copa America

    Source: Ancelotti to coach Brazil from 2024 Copa America

    Djokovic, Swiatek win at Wimbledon as confetti-throwing protesters strike

    Djokovic, Swiatek win at Wimbledon as confetti-throwing protesters strike

    PSG appoint Luis Enrique as new coach

    PSG appoint Luis Enrique as new coach

    Alcaraz wins Queen’s, returns to world number one

    Alcaraz wins Queen’s, returns to world number one

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Travel
    Why the Queenship of Mary matters

    Why the Queenship of Mary matters

    Human rights group files ICC complaint over anti-Christian violence in Nigeria, accusing public officials of “crimes against humanity”

    NDLEA, NYCN, Stakeholders Meet on Tackling Drug Abuse

    2 billion people across globe lack clean drinking water, says UN

    2 billion people across globe lack clean drinking water, says UN

    Rap group call out publication for using their image in place of ‘gang’

    Meet the woman who’s making consumer boycotts great again

    New campaign wants you to raise funds for abuse victims by ditching the razor

    Twitter tweaks video again, adding view counts for some users

    India is bringing free Wi-Fi to more than 1,000 villages this year

    Betterment moves beyond robo-advising with human financial planners

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
No Result
View All Result
Trinitas News
No Result
View All Result
Home News

Nigeria to spend next 40 years repaying controversial ₦23.72tr CBN overdrafts to FG

by Trinitas News
May 8, 2023
in News
0
Nigeria to spend next 40 years repaying controversial ₦23.72tr CBN overdrafts to FG
492
SHARES
1.4k
VIEWS
Share on FacebookShare on Twitter

Report by Guardian
Edited by Ononye VC

The Senate, on Wednesday, abandoned its previous hard-line stance and approved the conversion to a 40-year bond of the FG’s ₦23.72 trillion unappropriated expenditure funded by the Central Bank of Nigeria (CBN) through its ways and means (W&M) window.

President Muhammadu Buhari, last year, wrote to the National Assembly to approve the amount alongside a fresh ₦1 trillion it planned to take from the window (bringing the total value earmarked for securitisation to ₦23.72 trillion) for conversion to a 40-year tenure bond priced at nine per cent.

The bond conversion, which would ultimately move the amount from the balance sheet of the CBN to the Debt Management Office (DMO) for management, has a three-year moratorium, the Buhari administration disclosed.

The Senate and the House of Representatives had at several times turned down approval for lack of proper explanation on how proceeds of the loans would be spent.

With the Senate’s approval, the president’s efforts to push through has now narrowed to the House of Representatives, which had rejected the plea for lack of sufficient explanation of the utilisation of the facility. Sources said the Reps might discuss the request for possible approval when they convene next week.

The lower chamber would have approved the fresh additional borrowing of ₦1 trillion before proceeding on election recess but held back its approval for the restructuring of the controversial ₦22.72 trillion, seeking further explanation on the accumulation.

When the lower chamber of the National Assembly approves the request, the amount would be moved from the CBN book where it is currently being serviced at 21 per cent interest. The federal government said it agreed to an interest rate payment of the going monetary policy rate (MPR) plus 300 basis points (bps) as the price of the loan. MPR is currently 18 per cent with the possibility of a further upward review.

Buhari hinted late last year that the FG would spend an additional ₦1.8 trillion servicing the debt, except it is converted to a sovereign bond priced at nine per cent. The Guardian had reported that with the current interest of 21 per cent, the government could spend as much as ₦4.6 trillion as the cost of yearly servicing.

If the president secures consolidated approval in the coming weeks, the current cost of the loan would come down by as much as 57 per cent. But that depends on if the negotiated nine per cent bond price subsists as the cost of commercial debt has increased in the past months.

The approval could open a floodgate of litigation over the legality of the accumulated W&M advanced ab initio. When the Buhari administration assumed office, CBN’s overdraft to the government stood at ₦789.7 billion. The amount has since 2015 ballooned by 2,902 per cent to its current value (₦23.72 trillion).

But the controversy is more about its alleged violation of the CBN Act than the alarming growth. According to Section 38 of the CBN Act, “the Central Bank may grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue at such rate as the Bank may determine”.

But it adds: “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government. All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted and if such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid.”

Yesterday, a renowned monetary policy expert and professor of applied economics, Godwin Owoh, said the Senate’s approval amounts to illegality that would be challenged by the court by interested Nigerians.

Describing the legislative action as approval in arrears, he said the National Assembly should have focused on interrogating how the proceeds of the loans, which were not appropriated.

The administration relied on the window to cater to short-term or emergency needs and fund delayed expected cash receipts.

Adopting the report of its special committee on W&M advances, which considered the request of the president on the issue, the Senate said the restructuring was approved because the advances were made to ensure that the government did not shut down.

The Senate further approved the sum of ₦180.46 billion being the balance of the supplementary budget and the interest accrued on the W&M advances.

The upper legislative chamber warned that subsequently “if there is a need to exceed the five per cent threshold of the prior year’s revenue, recourse must be made to the National Assembly for approval”.

On states, whose budget shortfalls were also funded through the CBN lending window, the Senate advised: “The Federal Government should begin the process of recovering the portion of the W&M given as loans to state governments as further deferment of the repayment of the loans by the states will not be healthy for the economy.”

It also urged the government to expedite action on the repayment of the loans through treasury bills and bond issuance, saying it will not condone future accumulation without recourse to the National Assembly.

Presenting the report of the special committee, its chairman and senate majority leader, Ibrahim Abdullahi Gobir, said the committee found out that “part of the monies were given to state governments as loans to augment budgetary shortfalls in their various states”.

“Most of the requests for funds for an increase in W&M were made to Mr. President on the need to finance the budget due to revenue shortfall. Such requests were either made by the Minister of Finance, Budget and National Planning or the CBN Governor.

“The Federal Government as a result of revenue shortfalls occasioned by the COVID-19 pandemic and low oil prices relied heavily on the W&M to finance its budget deficit to keep the country working for the people. The monies received by the Federal Government were actually used for funding critical projects across the country.

“Due to the serious shortfall in Government Revenue, the Federal Government for the economy not to collapse, was compelled to borrow repeatedly from the CBN, exceeding the five per cent threshold of the prior year’s revenue as stipulated by the CBN Act,” the report stated.

The report further disclosed, “the Federal Government through the Ministry of Finance, Budget, and National Planning has concluded plans to convert the CBN loans to tradable securities such as treasury bills and bond issuance”.

Mobilising his colleagues for the rejection of the president’s request earlier, Senator George Thompson Sekibo explained that the advances were illegal and unconstitutional. He informed the Senate that the action of the 0resident was in breach of the CBN Act and the Senate standing rules.

“We should be abreast with the information that such money was going to be taken because it was being taken on behalf of the people of Nigeria and we are entrusted with the power to make laws. They brought this without details for us to approve,” the Senator said.

But the senate president, Ahmed Lawan, attempted several times to get the Senate to accede to the president’s request – a plea that hit the rock.

Share197Tweet123Share49
Trinitas News

Trinitas News

  • Trending
  • Comments
  • Latest
Late Rev Fr Cyril Eze for burial on 14th July 2023

Late Rev Fr Cyril Eze for burial on 14th July 2023

July 10, 2023
Onitsha priests inducted into the Medical and Dental Council of Nigeria   Archbishop Okeke congratulates them

Onitsha priests inducted into the Medical and Dental Council of Nigeria Archbishop Okeke congratulates them

March 9, 2023
Archbishop Valerian Okeke Appoints Rev Fr Dr George Adimike As Onitsha Metro Chaplain of KSM

Archbishop Valerian Okeke Appoints Rev Fr Dr George Adimike As Onitsha Metro Chaplain of KSM

August 2, 2023
Pope calls for prayers for Nigerian priest, suffering Ukrainians

Pope calls for prayers for Nigerian priest, suffering Ukrainians

1
Take Blessed Virgin Mary home by saying your rosary daily – Archbishop Okeke

Take Blessed Virgin Mary home by saying your rosary daily – Archbishop Okeke

0
Wizkid: I’ll have a joint tour with Davido

Wizkid: I’ll have a joint tour with Davido

0
TC Chairman, Onitsha South LGA, Orji Promise To Revamp Council

Jubilation in Anambra as Gov Soludo declares free education

September 23, 2023
Gov Soludo orders dislodging of touts and disorderly motor parks at Upper Iweka

Gov Soludo orders dislodging of touts and disorderly motor parks at Upper Iweka

September 23, 2023
The Imperative of Real Governance: A Call to Tackle Spiraling Insecurity

The Imperative of Real Governance: A Call to Tackle Spiraling Insecurity

September 23, 2023
Trinitas News

Copyright © 2023 trinitasnews.com / Built by Goallord Creativity - 08136768149

Navigate Site

  • About
  • Advertise
  • Privacy & Policy
  • Contact

Follow Us

No Result
View All Result
  • Home
  • News
    • Politics
    • Business
    • World
    • Science
  • Entertainment
    • Gaming
    • Music
    • Movie
    • Sports
  • Tech
    • Apps
    • Gear
    • Mobile
    • Startup
  • Lifestyle
    • Food
    • Fashion
    • Health
    • Travel

Copyright © 2023 trinitasnews.com / Built by Goallord Creativity - 08136768149

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In