Capital market specialists have warned that the securitization of the Senate’s N22.7 trillion Ways and Means advances to the Federal Government from the Central Bank of Nigeria could raise the interest rates on future debt securities.
According to some analysts in the capital market, the belief that the government won’t be able to pay its debts back may cause interest rates to rise in the debt market. FGN will now have to deal with a larger debt commitment to the investing public that it cannot afford to ignore.
“FGN and CBN illegally undertook these Way and Means advances, rendering this administration incompetent in financial management.
According to the Debt Management Office, the principal payments to service the loans from the Central Bank of Nigeria through the Ways and Means Advances will begin in four years’ time.