By Henry Umoru

BARELY one hour after reading a letter from President Bola Tinubu, requesting for the approval of the the securitisation of the outstanding debit balance of N7.3 trillion Ways and Means from the Central Bank of Nigeria (CBN), the Senate immediately approved it.

Soon after the letter was read yesterday by the President of the Senate, Senator Godswill Akpabio, senators immediately went into the Committee of the Whole to consider and approve it.

Tinubu had written the Senate, seeking for the consideration and subsequent approval for the securitisation of outstanding debit balance of N7.3 trillion Ways and Means from the Central Bank of Nigeria (CBN).

In the letter, Tinubu called the attention of the Senate to “the provisions of section 38 of the subsisting CBN act 2007 which stipulates that the apex bank may grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue provided such overdraft do not surpass 5% of Government revenue from the Previous year.”

Tagged ‘Securitization of the debit balance of Ways and Means in the Consolidated Revenue Fund of the Federal Government of Nigeria’, the President’s letter asked the Senate to note that “from available information by the CBN, the Consolidated Revenue Fund (CRF) account of the Federal Government of Nigeria (FGN) stood at N7.3 trillion as at December.

Tinubu said, “While the Federal Government is considering various measures to forestall the use of Ways and Means advances for domestic debt servicing, it has become highly imperative to securitirise the outstanding Ways and Means Advance of the Fedrral Governnent of Nigeria before the end of the year 2023.”

According to him, the securitization of the Ways and Means will lead to the realization of the many benefits including “reduction of debt service costs as interest rate for the securitized Ways and Means is lowered at 9% per annum compared to MBR which is 0.3%”

He said “the savings arising from the much lower interest rate will help to reduce the deficit in the budget”.
Tinubu also said that securitisation would help to achieve “improvement in debts transparency as securitised Ways and Means Advances are included in the public debts statistics.”

“In view of the forgoing the senate is invited to kindly consider and approve the securitisation of the outstanding debit balance of N7.3tr in the same order as at December 2023.”