DMO Says Repayment Of N22.7trn Loan To Begin 2026

Director General of DMO, Patience Oniha
Director General of DMO, Patience Oniha

FIRS

DMO Says Repayment Of N22.7trn Loan To Begin 2026

The repayments of principal to service the loans from the Central Bank of Nigeria (CBN) through the Ways and Means Advances will begin in four years.

This was according to a disclosure by the Debt Management Office (DMO) on the Securitization of the N22.7tn Ways and Means Advances.

It was also disclosed in the statement that there would be a moratorium on payment of principal for about three years.

”The Securities will be issued to the Central Bank of Nigeria by the Federal Government of Nigeria. It will not be issued to the public by the FGN to raise funds”, DMO noted.

The debt office also listed some benefits of securitisation, saying that it would lead to debt transparency and reduce the debt service cost.

“It will reduce the Debt Service Cost as the new Interest Rate is 9% p.a. compared to the Monetary Policy Rate plus three per cent which translates to 21.0 per cent p.a. (MPR – 18.0 per cent + 3 per cent) currently being charged on the Ways and Means Advances.

“The large savings arising from the much lower Interest Rate will help reduce the deficit in the Budget and expectedly, the level of New Borrowngs”, it added.

On the repayment, it noted that the Federal Government will begin repayment of interest this year, while that of principal will begin in four years.

DMO also noted that the securitisation of the Ways and Means Advances does not involve new money being given to the Federal Government as the CBN had already provided the funds to the government.

According to the statement, both the Senate and the House of Representatives have approved the request of President Muhammadu Buhari to restructure the N22.7 trillion Ways and Means Advances.

The 2023 fiscal framework document has showed that the Federal Government allocated N6.31trillion to service its total debts.

A breakdown showed that the Federal Government allocated approximately N3.3 trillon to service domestic debts, N1.81trillion for foreign debts, and N1.2 trillion for ways.

nigerian news today live

Note: This article have been indexed to our site. We do not claim legitimacy, ownership or copyright of any of the content above. To see the article at original source Click Here

Related Posts
Index Of News