Following concerns from some legislators, the Nigerian Senate on Wednesday increased the country’s 2023 budget by 6.4% to ₦21.83 trillion ($49 billion) and postponed a decision on the president’s request to convert central bank overdrafts to long-term bonds.
President Muhammadu Buhari had previously requested permission from the legislature in a letter dated December 20 to convert ₦23.7 trillion ($53 billion) in central bank loans to the government into 40-year bonds at 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.
A vote on the idea was postponed until a later time when several lawmakers in a boisterous session claimed that the loan conversion was unlawful.
To lower double-digit inflation, the IMF has requested that Nigeria gradually stop supporting the government with money from the central bank.
Budget for 2023 that Buhari unveiled in October is ₦20.51 trillion. However, lawmakers upped the budget on Wednesday after increasing the $70/barrel oil price assumption to $75/barrel.
The new budget must be signed into law by the president.
Nigerians are preparing to vote in a national election in February, during which incumbent President Buhari will not run for reelection due to term restrictions, and the main problems include rising debt, slow economic growth, high inflation, and growing insecurity.
