Senate okays securitization of remaining N7.3tn ways and means

Senate okays securitization of remaining N7.3tn ways and means

The outstanding 7.3 trillion naira Ways and Means has been securitized by the senate

The securitization was approved by the upper legislative chamber 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 engender the realization of reduction of debt service cost.

READ ALSO:

• Police arrest Dorcas Adeyinka, two others for cyberstalking, threat to life
• Electricity tariff hike looms as DisCos prepare for Jan 1 increase
• N’Assembly passes N28.78tn 2024 budget, raises projected exchange rate

The letter added that the interest rate for the securitized Ways 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.

Senate okays securitization of remaining N7.3tn ways and means