The Nigerian Senate raised the budget for 2023 by 6. 4% to 21. 83 trillion naira ($49 billion) and postponed a decision on the president’s request to convert central bank overdrafts to his administration into long-term bonds after some legislators voiced concerns about the proposal.
President Muhammadu Buhari requested permission from the legislature in a letter dated December 20 to convert $53 billion in central bank loans to the government into 40-year bonds with 9% interest, as well as an additional one trillion naira in loans from the bank.
However, Buhari has claimed that his government was forced to borrow in order to exit two recessions in the previous seven years. Economists estimate that Nigeria’s government spends more money on debt repayment than on healthcare and education.
IMF has asked Nigeria to phase out central bank financing of the government to reduce double-digit inflation. Buhari in October presented 20.51 trillion naira budget for 2023. But lawmakers passed an increased budget after they raised oil price assumption to $75 a barrel from $70.