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A file photo of the Senate President Godswill Akpabio
The Senate has approved and confirmed securitization of the outstanding 7.3 trillion naira Ways and Means as requested by President Bola Tinubu.
The Ways and Means provision allows the government to borrow from the Central Bank if it needs short-term or emergency finance to fund delayed government expected cash receipts of fiscal deficits.
According to the letter to the Senate, the President stated that the securitization of Ways and Means would lead to the realization of reduction of debt service cost.
The letter added that the interest rate for the securitizedWays and Means advances lowered at 9% per annum compared to MPR which is +3%.
The request which is not a new borrowing is to extend the repayment period of the existing loans.
The terms of the securitization of the Ways & Means advances as gazetted by the Debt Management Office (DMO) involve the issuance of debt securities with a 40-year tenor by the Federal Government to the CBN, with an interest rate of 5% and a 3-year moratorium on principal repayments. (Channels TV)
