The Debt Management Office (DMO) says the securitisation of CBN\u2019s N22.7 trillion \u201cWays and Means Advances\u2019\u2019 to the Federal Government will improve debt transparency.<\/P>
<\/P>
\u201cWays and Means Advances\u2019\u2019 allows the Federal Government to borrow short-term or emergency loans from the CBN to cushion expected cash receipts shortfalls.<\/P>
<\/P>
The Senate on Wednesday approved a request by President Muhammadu Buhari to restructure advances already collected through securitisation.<\/P>
<\/P>
Implementation of the restructuring request by the CBN would need concurrent approval by the House of Representatives, however.<\/P>
<\/P>
The Federal Government promised to repay already collected short-term loans with securities like treasury bills and the issuance of bonds.<\/P>
<\/P>
It would issue the securities to the CBN and not to the public.<\/P>
<\/P>
DMO\u2019s Director-General, Mrs Patience Oniha, explained in Abuja on Friday that securitisation would allow the inclusion of the \u201cWays and Means Advances\u2019\u2019 in public debt statistics.<\/P>
<\/P>
\u201cIt 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.<\/P>
<\/P>
\u201cThe large savings arising from the much lower interest rate will help to reduce budget deficits and expectedly, the level of new borrowings,\u2019\u2019 she explained.<\/P>
<\/P>
She stated also that provision for interest in the securitised \u201cWays and Means Advances\u2019\u2019 starting from 2023, and the principal payment, starting from four years ahead, would be made in the Federal Government annual budgets.<\/P>
<\/P>
She explained that the securitisation did not involve new loans.<\/P>
<\/P>
\u201cThe CBN had already provided the funds to the Federal Government.<\/P>
<\/P>
\u201cBased on statutory provisions, the approval of the Senate and the House of Representatives are required for securitisation.<\/P>
<\/P>
\u201cImplementation will be upon receipt of the approval of the House of Representatives,\u2019\u2019 Oniha stressed.<\/P>
<\/P>
After securitisation, the \u201cWays and Means Advances\u2019\u2019 will run for a tenor of 40 years with three years moratorium for the principal only and repayment amortisation of more than 37 years.<\/P>
<\/P>
Source: News Agency of Nigeria<\/P>
<\/P><\/p>\n","protected":false},"excerpt":{"rendered":"
The Debt Management Office (DMO) says the securitisation of CBN\u2019s N22.7 trillion \u201cWays and Means Advances\u2019\u2019 to the Federal Government will improve debt transparency.\u201cWays and Means Advances\u2019\u2019 allows the Federal Government to borrow short-term or emerge…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[71],"tags":[],"yoast_head":"\n