Following the approval of the Nigerian Senate the day before, the lower house of parliament voted in favor of the plan to convert 52 billion dollars in short-term loans to the central bank into long-term debt on Thursday.
Due to a reduction in oil production caused by petroleum theft in the Niger Delta, the Nigerian government has been forced to seek an overdraft from the central bank in order to offset mounting deficits.
In December, President Muhammadu Buhari demanded a restructuring of central bank loans.
If both houses of parliament ratify the bill before Buhari’s term as president expires this month, it would become law with his signature.
A Senate panel issued a report on Wednesday revealing that the funds were utilized to pay for federal operations and state government support. The group proposed that the Senate agree to convert the loans into 9% debt over 40 years.
The Debt Management Office anticipated in January that Nigeria’s entire debt would rise to $172 billion as a result of the loan-to-bond exchange and further borrowings to cover the 2023 budget.
Despite Buhari’s claim that his government had no choice but to borrow its way out of two recessions in the previous seven years, official data shows that Nigeria spent more than 90% of its income last year on debt repayments, leaving little for education and health.
