DMO: Securitisation of CBN’s N22.7trn Advances To FG’ll Improve Transparency

The New Diplomat
Writer

Ad

Dangote Vs PENGASSAN Face-off Escalates as NLC Orders Nationwide Strike

By Abiola Olawale The face-off between Dangote Refinery, owned by Africa's richest man, Aliko Dangote, and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has continued to escalate as the Nigeria Labour Congress (NLC) has ordered full-scale mobilization of its affiliate unions for a nationwide strike. The NLC said it ordered the…

PSC warns senior officers: fail promotion exam three times, face retirement

By Obinna Uballa The Police Service Commission (PSC) on Monday conducted a compulsory promotion examination for 30 senior police officers in Abuja, with a stern warning that those who fail the test three times will be forced into retirement. The exercise, held at the Commission’s headquarters, involved one Assistant Inspector-General of Police, two Commissioners of…

Brent Prices Retreat below $70 as OPEC+ Mulls Another Output Hike

Brent Crude prices dropped below $70 per barrel, and WTI Crude slipped below $65, due to increased supply and expectations of further output hikes from OPEC+. Iraq resumed crude oil exports from Kurdistan via a pipeline to Turkey, adding an estimated 230,000 barrels per day to the global oil market after a two-and-a-half-year halt. OPEC+…

Ad

By Agency Report

The Debt Management Office (DMO) says the securitisation of CBN’s N22.7 trillion “Ways and Means Advances’’ to the Federal Government will improve debt transparency.

“Ways and Means Advances’’ allows the Federal Government to borrow short-term or emergency loans from the CBN to cushion expected cash receipts shortfalls.

The Senate on Wednesday approved a request by President Muhammadu Buhari to restructure advances already collected through securitisation.

Implementation of the restructuring request by the CBN would need concurrent approval by the House of Representatives, however.

The Federal Government promised to repay already collected short-term loans with securities like treasury bills and the issuance of bonds.

It would issue the securities to the CBN and not to the public.

DMO’s Director-General, Mrs Patience Oniha, explained in Abuja on Friday that securitisation would allow the inclusion of the “Ways and Means Advances’’ in public debt statistics.

“It will reduce the debt service cost as the new interest rate is 9 per cent per annum while the Monetary Policy Rate of the CBN is 21 per cent per annum.

“The large savings arising from the much lower interest rate will help to reduce budget deficits and expectedly, the level of new borrowings,’’ she explained.

She stated also that provision for interest in the securitised “Ways and Means Advances’’ starting from 2023, and the principal payment, starting from four years ahead, would be made in the Federal Government annual budgets.

She explained that the securitisation did not involve new loans.

“The CBN had already provided the funds to the Federal Government.

“Based on statutory provisions, the approval of the Senate and the House of Representatives are required for securitisation.

“Implementation will be upon receipt of the approval of the House of Representatives,’’ Oniha stressed.

After securitisation, the “Ways and Means Advances’’ will run for a tenor of 40 years with three years moratorium for the principal only and repayment amortisation of more than 37 years. (NAN)

Ad

Unlocking Opportunities in the Gulf of Guinea during UNGA80
X whatsapp