A couple of weeks ago, Nigeria’s finance minister, Zainab Ahmed, announced the conversion of its ₦20 trillion ways and means loan facility from the CBN to a 40-year bond.
This loan facility from the Central Bank of Nigeria (CBN) to the Federal Government (FG) has gained media attention recently due to its rapid expansion and how the CBN has been flagrantly breaking its own laws.
Key takeaways:
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The Federal Government plans to securitise its ₦20 trillion debt from the CBN into a 40year bond at a 9% interest rate.
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This will worsen our debt metrics and add about ₦1.8 trillion yearly in debt service costs. For context, our total debt service cost in 2022 amounted to ₦3.98 trillion.
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Given limited revenues, the Minister of Finance—Mrs Zainab Ahmed—should have prepared more conservative budgets to better manage the country’s budget deficit and loan growth.
Ways and means represent a loan by
