FG Seeks To Amend Law Allowing Settlement Of N2.7tr debt

Nigeria’s Federal Government wants the National Assembly to amend its spending law to enable a debt programme to settle N2.7tr ($8.6bn) worth of obligations including pensions and salary arrears.
A letter from Vice President Yemi Osinbajo, read out in the Senate on Tuesday, requested amendments to the law, which stipulates allocation of government spending, to allow Nigeria to fund recurrent expenditure from proceeds of the debt rather than just capital projects.
Nigeria’s Fiscal Responsibility Act states that proceeds of government borrowings can only be applied towards capital expenditure.
Osinbajo said the amendment was to provide the legal backing for the use of the debt to meet the obligations.
The letter was sent last month while President Muhammadu Buhari was on medical leave in Britain, but read out after the Senate reconvened following a seven-week recess.
Osinbajo’s letter said the obligations had become inimical to government plans to revive the economy through the provision of modern infrastructure and settle pension and salary arrears dating back five years.
Reuters recall Finance Minister Kemi Adeosun as saying the government plans to refinance $3 billion worth of treasury bills denominated in naira with dollar borrowing to lower costs and improve its debt position.

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