Nigeria agrees to convert $49bn loans from Central Bank to bonds
Nigerian lawmakers approved President Muhammadu Buhari’s request to convert 22.7 trillion naira ($49 billion) loans from the central bank into bonds that will be repaid over several decades.
The approval from the Senate is expected to push Nigeria’s debt-to-gross domestic product ratio near the 40% limit set by the government.
“The advances were made to ensure that the government does not shut down,” said a report by the special committee on the matter.
The Central Bank of Nigeria is only allowed to provide temporary financing to the federal government, limited at 5% of the previous year’s budget with a mandate that requires payment within the same financial year.
The so-called ‘ways and means advances’ from the central bank has increased astronomically to 28.8 trillion naira in 2022 from 790 billion naira since Buhari assumed the reigns of Africa’s biggest economy in 2015.
