Dr. Zainab Ahmed, the Minister of Finance, Budget, and National Planning, claimed that she had been given permission to securitize the Ways and Means portfolio of the Central Bank of Nigeria (CBN), which is worth N20 trillion.
At the Ministerial Presentation of the 2023 Budget at the Ministry of Finance Headquarters in Abuja, Ahmed made this announcement.
She also revealed that the government’s contingent liabilities as a share of GDP fell from 2.75% in 2020 to 2.64% in 2021. By the end of 2022, it is anticipated to be in this region.
Dr. Ahmed said that the “total public debt as a percentage of GDP stood at 23.06% as of June 30, 2022, within the 55% threshold recommended by the International Monetary Fund (IMF)/World Bank (WB) as well as Nigeria’s self-imposed limit of 40% set in the MTDS 2020-2023, even after including the outstanding balance on CBN Ways & Means Advances”
She added that the Target Ratio under the MTDS 2020-2023 is 70:30 and that the Debt Management Office was expecting to achieve the target by end of 2023.
While responding to the question on the Ways and Means, the minister said, “The total Ways and Means today is 20 trillion and we have the approval to securitize.
The securitization will be over in a 40-year period with an interest rate of 9%. But over the years, we have been paying the interest component at the current rate that is charged on the Ways and Means.”
She added that the exposure to refinancing risk remained stable as a result of the strategy of issuance of long-dated securities in the domestic and international markets in addition to accessing long-term funds from multilateral and bilateral lenders.
