Nigeria’s Senate on Wednesday increased the 2023 budget by 6.4% to 21.83 trillion naira ($49 billion) and delayed a decision to the president’s request to convert central bank overdrafts to his administration to long-term bonds after some lawmakers questioned the plan.
In a letter to parliament dated Dec. 20, President Muhammadu Buhari sought approval to turn $53 billion worth of central bank loans to government to 40-year bonds at 9% interest including an extra one trillion naira loan to the government from the bank.
Economists say that Nigeria’s government is spending more money on debt repayments than on education and health, but Buhari has said his government had no choice but to borrow its way out of two recessions in the past seven years.
Some lawmakers in a rowdy session argued that the loan conversion was unconstitutional, prompting the Senate President Ahmad Lawan to suspend a vote on the proposal until a later date.
The 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 on Wednesday after they raised oil price assumption to $75 a barrel from $70.
The president will need to sign the revised budget for it to become law.
Rising debt, weak economic growth, high inflation and mounting insecurity are major issues for Nigeria as voters head for national election in February in which incumbent Buhari will not stand for re-election to due term limits.