Nigeria to pay extra $4bn if loan-bond swap is denied: Buhari

Some lawmakers had questioned the plan to convert $53bn in central bank overdrafts into 40-year bonds.

Nigeria’s President Muhammadu Buhari says Africa’s largest economy will have to pay 1.8 trillion naira ($4bn) extra interest this year if parliament rejects a loan-to-bond swap request on the central bank’s overdrafts to the government.

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Buhari made the comments in his budget speech to parliament after signing the 2023 budget into law on Tuesday.

In December, the Senate delayed a decision on the president’s request to convert $53bn worth of central bank overdrafts to the government into 40-year bonds after some lawmakers questioned the plan.

In his speech on Tuesday, Buhari said the government currently pays a 3 percent margin above the central bank’s lending rate of 16.5 percent but his administration has negotiated a rate of 9 percent for the bonds.

Lawmakers increased the size of the 2023 budget by 6.4 percent to 21.83 trillion naira ($49bn) after they raised the assumed oil price benchmark to $75 a barrel from $70.

“Considering the imminent transition process … I decided to sign the 2023 appropriation bill into law … to enable its implementation to commence without delay,” the president said, referring to a general election coming up in February.

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